Govt draws up 50-country export plan to offset Trump tariff hit
These nations, spread across the Middle East, Africa, Latin America, Europe, and other key regions, together account for nearly 90% of India's outbound shipments.
The plan focuses on redirecting goods affected by the tariff escalation — including textiles, seafood, engineering goods, gems and jewellery, petroleum products and chemicals—to alternative buyers through targeted trade promotion and market access initiatives.
Meetings are taking place in the commerce ministry to draw up alternative plans for routing the affected products to potential markets.
Officials from various ministries and industry bodies have been brainstorming to identify product-specific opportunities and push for faster trade facilitation with these destinations, said the first among the two mentioned above.
The goal is to calibrate export plans without impacting labour-intensive sectors such as textiles, gems and jewellery, leather goods, engineering goods, and agricultural and processed food exports, including shrimps.
The US remains India's largest single-country export destination, but the government's strategy aims to reduce that dependence and secure long-term resilience for exporters hit by the ongoing tariff dispute. In FY25, India exported goods worth $86.5 billion to the US, or about 20% of the country's total merchandise exports of $433.56 billion.
The move comes after US President Donald Trump announced a new 25% duty on Indian goods for its continued purchase of Russian oil, adding to an existing 25% tariff. The duties are set to take effect on 27 August, leaving a window for both sides to reach an agreement.
The tariffs threaten to disrupt trade flows between the two countries and sectors like textiles, engineering goods, marine products, gems and jewellery and leather are particularly vulnerable. They could see exports fall by as much as 40%.
In addition to seeking out new markets, the government is considering offering financial relief to exporters, said the second senior official. The government is also considering reintroducing the Interest Equalization Scheme (IES), which offers exporters a subsidy on interest rates to lower borrowing costs, and such initiatives would be funded by a new ₹20,000 crore export promotion mission.
For engineering goods, the government is focusing on expanding exports to new target markets such as Sao Tome, Macao, Georgia, Croatia, Guinea-Bissau, Belize, Azerbaijan, Myanmar, Lithuania, Norway, Somalia, and Greece. Currently, key export destinations for Indian engineering goods include the US, UAE, Saudi Arabia, Germany, and Italy. The Netherlands, South Korea, Belgium, Mexico, Japan, and Kuwait are also seen as promising markets.
For agricultural and processed food products, the focus will be on Nigeria, Switzerland, Lithuania, Slovenia, Mexico, Sweden, Portugal, Cameroon, Djibouti, Latvia, Egypt, Senegal, Canada, Argentina, and Brazil.
With tariffs in the US now at 50% for many garment products, Indian exporters are exploring alternative markets such as the UK, Australia, Canada, the Middle East, and emerging economies in Africa and Latin America to maintain shipments and offset expected order losses.
The sectors that are of concern are textiles (exports worth $10.91 billion), engineering goods ($19.16 billion), agriculture ($2.53 billion), gems and jewellery ($9.94 billion), leather ($948.47 million), marine products ($2.68 billion), and plastics ($1.92 billion).
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