India faces a significant export disruption as the United States introduces a 50% import tariff on Indian goods, potentially impacting outbound trade worth ₹4.22 lakh crore, as per news reports. In response, India is strategising a shift toward new destinations and expanding its Free Trade Agreements (FTAs).
India exports goods worth ₹38 lakh crore globally every year, of which 20% goes to the US. With the US now imposing a steep 50% import tax on certain products from India, exports amounting to ₹4.22 lakh crore are projected to be affected. This development could impact a wide range of sectors, particularly textiles, pharmaceuticals, automotive components, jewellery, and seafood.
To minimise the risk of overdependence on a single country, India has launched a comprehensive plan focusing on 50 alternative international markets. These include high-potential countries in Europe, Africa, the Middle East, Russia, China, and East Asia. The strategy aims to absorb the loss from the US market by redistributing trade across several regions.
India is aligning sectors with specific countries to optimise outcomes. For seafood exports, markets like Russia, the UK, South Korea, Norway, and the European Union are being tapped. The diamond and jewellery sector is shifting focus to Vietnam, Malaysia, Thailand, and African nations that offer new demand pipelines.
Read More: India Hires Second US Lobbying Firm Ahead of 50% Tariff Hike on Exports!
India has formalised FTAs with Iceland, Liechtenstein, Norway, and Switzerland, effective from October 1, 2025. A deal with the UK is also expected by April 2026. Furthermore, India is expanding deliberations with nations like Oman, Chile, Australia, and the European Union to enhance trade efficiency and reduce tariff burdens.
The 50% US tariff is poised to affect ₹4.22 lakh crore of Indian exports, raising alarms across key sectors. India’s dynamic approach involving new trade partnerships and FTAs showcases a shift towards diversified export growth. With structured efforts, India aims to shield its economy from trade shocks and build resilience for the future.
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Published on: Aug 28, 2025, 2:18 PM IST
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