India’s strategy to diversify its export markets and reduce the impact of the steep 50 per cent tariffs imposed by the United States is beginning to show results, according to a report by The Economic Times. By the end of September, exports of cotton garments to the United Arab Emirates, France, and Japan increased, even as shipments to the U.S. declined by 25 per cent compared to the previous year.

India’s total merchandise exports rose by 6.7 per cent year-on-year to reach $36.38 billion in September. However, exports to the U.S., India’s largest trading partner, dropped by nearly 12 per cent to $5.46 billion during the same month. Despite the U.S. accounting for around one-fifth of India’s total exports, certain sectors remain heavily reliant on the American market — about 60 per cent of carpet exports, 50 per cent of made-ups, 30 per cent of gems and jewellery, and 40 per cent of apparel shipments go to the U.S.

Government data for September showed a sharp 26.9 per cent decline in marine product exports to the U.S., while exports to China, Vietnam, and Thailand surged by over 60 per cent. Similarly, products such as gems and jewellery, basmati rice, tea, carpets, and leather goods witnessed a fall in U.S.-bound shipments but recorded growth in other destinations. The U.S. had initially imposed a 25 per cent tariff on Indian-origin goods, which was doubled to 50 per cent from August 25. Both countries are currently in discussions over a bilateral trade agreement aimed at raising bilateral trade to $500 billion by 2030.

Exports of basmati rice and tea to the U.S. also declined in September, according to data from the commerce and industry ministry. While the U.S. is not a major market for Indian tea, exports there fell by 22 per cent year-on-year. However, shipments to the UAE, Iraq, and Germany increased. Exports of basmati rice to Iran surged six times to $41.07 million, helping to offset part of the loss from the U.S. market.

Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), said that the growing diversification of export destinations is a positive sign for the long-term growth of India’s exports. Exports of handmade carpets to the U.S. fell by 26 per cent, but sales to Canada and Sweden rose during the same period. As part of its diversification efforts, the commerce ministry has identified 40 key importing nations across North America, Europe, Asia, Africa, Latin America, and Oceania — regions that together account for about three-fourths of global textile and apparel demand. Outreach initiatives are also being designed to help India expand its market share in these countries by an additional 5 to 6 per cent.