India’s dependence on the US as its greatest export market has remained largely unchanged regardless of President Donald Trump’s tariff measures and New Delhi’s efforts to diversify commerce, in line with an evaluation of commerce ministry knowledge.The US accounted for round 20 per cent of India’s exports within the 12 months by means of July, broadly sustaining its share regardless of tariffs on Indian items reaching as excessive as 50 per cent throughout the interval. The tariff price was later lowered to 18 per cent in February and at present stands at 10 per cent.The US share of India’s exports has additionally elevated from 17.4 per cent in 2022-23, highlighting the problem of lowering dependence on the world’s largest financial system.India exported items value $88.5 billion to the US within the 12 months by means of July, in contrast with $21.5 billion to China, in line with calculations primarily based on official knowledge.
US stays India’s greatest export vacation spot
The US continued to guide India’s export locations in 2025-26, with exports value $87.31 billion, in contrast with $86.51 billion within the earlier monetary yr.The UAE was the second-largest vacation spot at $37.37 billion, adopted by China at $19.48 billion. India’s exports to China, nonetheless, rose sharply, rising 42 per cent within the 12 months by means of July.Different main markets included the Netherlands at $17.50 billion and the UK at $13.44 billion.India has additionally expanded the vary of merchandise it exports, including round 500 product traces, primarily in electronics, engineering and marine merchandise.The US stays notably vital for Indian exports of electronics, engineering items, prescribed drugs, gems and jewelry and textiles. Regardless of months of negotiations, India and the US have but to formally conclude their broader commerce settlement.In the meantime, exports to a number of smaller markets, together with Tanzania, Vietnam, South Korea, Sri Lanka and Kenya, have recorded robust development, though their total contribution stays a lot smaller than that of the US.Pritam Banerjee, a commerce analyst and former head of the Centre for WTO Research, mentioned free commerce agreements may assist India appeal to manufacturing away from China, however warned that the chance could also be restricted.He mentioned deeper integration with G20 economies, which account for about 85% of world GDP, in addition to markets in Latin America, the Center East and Africa, may assist India speed up that shift.
India steps up commerce diversification
The uncertainty round US commerce coverage has prompted India to speed up negotiations with different main markets and search new export locations.India signed a commerce cope with the UK, which got here into impact in July, whereas agreements with the European Union, Oman and New Zealand have been additionally concluded in 2026 however are but to take impact.India has additionally resumed or stepped up commerce negotiations with a number of different markets, together with the Gulf Cooperation Council, Canada, Israel, Peru, Chile and the Southern African Customs Union.“The trade has turn out to be extraordinarily cautious of the truth that they must diversify as a method to de-risk,” Ajay Sahai, director basic of the Federation of Indian Export Organizations, mentioned. “And from that perspective, I feel it’s an excellent lesson the US tariff warfare taught us.”Sahai mentioned it may take two to 3 years for the impression of market diversification to turn out to be significant, whereas noting that the US remained probably the most engaging export marketplace for Indian companies.Commerce Secretary Rajesh Agrawal mentioned India was specializing in economies that collectively account for greater than two-thirds of world GDP.“In an setting of world uncertainty and shifting commerce patterns, FTAs additionally function institutional anchors for trusted financial partnerships,” Agrawal mentioned, including that the agreements have been aimed toward lowering reliance on any single market.
