Highlights:
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India’s Trade rose 6.7% in September, reaching $36.38 billion in merchandise exports.
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Exports to the U.S. declined 11.93% to $5.46 billion amid tariff increases of up to 50%.
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India’s Trade with alternative markets strengthened, with shipments rising to the UAE, France, Japan, China, Vietnam, and Thailand.
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Marine product exports to the U.S. fell 26.9%, but surged over 60% to China, Vietnam, and Thailand.
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Cotton readymade garment exports to the U.S. dropped 25% year-on-year.
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Basmati rice exports to Iran increased six-fold to $41 million.
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Tea exports to the U.S. fell 22%, but rose to the UAE, Iraq, and Germany.
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Handmade carpet shipments to the U.S. declined 26%, while exports to Canada and Sweden increased.
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India’s Trade diversification supported by free trade agreements and production-linked incentive schemes.
India’s Trade performance in September reflects a mixed pattern driven by changing global market dynamics and tariff pressures, particularly from the United States. Official data shows that while India’s Trade with its largest market declined sharply, broader export diversification efforts helped lift overall results. Merchandise exports increased 6.7% to $36.38 billion in September, even as shipments to the U.S. contracted nearly 12% to $5.46 billion.
This shift underscores a pivotal moment for India’s Trade strategy as higher tariffs in the U.S. market redirect export flows toward alternative destinations. The U.S. recently doubled tariffs on several Indian exports, first to 25% on August 7 and then to 50% from August 25. Despite this setback, India’s Trade has remained resilient through a conscious push to deepen engagement across Asia, Europe, and the Middle East.
India’s Trade and U.S. Market Pressure
The decline in exports to the U.S. is particularly significant given the volume India’s Trade relies on from this market. The U.S. accounts for about 18–20% of India’s merchandise exports. Key export sectors — including carpets, apparel, gems and jewelry, and made-ups — have historically depended heavily on American demand, with shares ranging from 30% to as high as 60%.
India’s Trade in apparel and textiles took a noticeable hit, with cotton readymade garment exports to the U.S. falling by 25% year-on-year in September. Marine product exports to the U.S. also declined sharply by 26.9%. These reductions highlight the immediate effect of steep tariff hikes and a cooling American demand cycle.
India and the U.S. are currently negotiating a bilateral trade agreement (BTA), and the long-term target is to expand total trade between the two countries to $500 billion by 2030. Until then, pressure on India’s Trade with the U.S. may continue as both tariffs and market realignments influence export decisions.
India’s Trade Diversification Strategy Gathers Pace
What stood out in the latest figures is that India’s Trade diversification strategy has started yielding results. Instead of relying on the U.S. as a single dominant market, exporters have increased outreach to countries such as the UAE, France, Japan, China, Vietnam, Thailand, and Sweden.
Exports to markets like the UAE and France rose, absorbing part of the U.S. decline. Marine exports surged more than 60% to China, Vietnam, and Thailand. Meanwhile, exports of products such as gems and jewelry, tea, leather goods, carpets, and basmati rice decreased in the U.S. but expanded in other destinations.
A senior official from the Ministry of Commerce said, “Export diversification is visible and is supported by India’s free trade agreements, thrust on production-linked incentive schemes, and deeper integration with global supply chains.”
India’s Trade Sees Agriculture and Handicraft Shifts
Agriculture-linked exports also show clear signs of market rebalancing. While tea exports to the U.S. fell 22%, tea shipments grew to the UAE, Iraq, and Germany. Basmati rice exports to Iran surged six-fold to $41 million in the same period.
Handmade carpets — traditionally dependent on the U.S., with 60% of shipments going there — saw a 26% decline in the U.S. market. However, exports of these goods increased to Canada and Sweden, offering new avenues for India’s Trade in handicrafts and artisanal goods.
Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), commented, “Export diversification has started to happen, and this is healthy for the growth of India’s exports.”
India’s Trade Expansion Plans and Future Outlook
To further strengthen India’s Trade footprint, the Commerce Ministry has mapped 40 major global markets across continents. These markets together represent nearly 75% of global demand for textiles and apparel. The government is planning targeted outreach programs to raise India’s 5–6% share in these economies. This strategy will focus on apparel, home textiles, technical textiles, and handicrafts, which are sectors expected to offer strong long-term export potential.
However, analysts caution that while diversification boosts resilience, long-term patterns will depend on future U.S. access. One trade observer noted that “it remains to be seen how long this shift lasts because the U.S. offers both volume and value. Once the U.S. market opens up post the BTA, some exporters might pivot back.”
India’s Trade results for September illustrate the dual challenge of managing tariff-driven headwinds while capitalizing on new global export opportunities. With strategic market mapping, free trade agreements, and production-linked incentive schemes in play, India’s Trade is positioned to keep expanding even amid changing global conditions.
