Trump tariffs failed to dent India's US export share? Here's what data shows

India's dependence on the United States as an export market has remained largely intact despite a year of tariff uncertainty under President Donald Trump and New Delhi's push to diversify trade.

Data from the Commerce Mministry for the 12 months through July show that the US continued to account for around 20% of India's exports. This comes even after Trump imposed tariffs of as much as 50% on Indian goods at one point. The rate was later reduced to 18% in February and currently stands at 10%.

US remains India's biggest export market

The figures underline the difficulty of quickly replacing the US market, which has strong demand for Indian electronics, engineering products, pharmaceuticals, gems and jewellery and textiles.

Ajay Sahai, director general of the Federation of Indian Export Organizations, said diversification would take time to produce significant results.

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"It will take at least two to three years for market diversification to show meaningful results," Sahai said, adding that the US remains the most attractive market.

India's share of exports headed to the US has actually increased over the years, rising to nearly 20% from 17.4% in 2022-23.

At the same time, exporters have become more cautious about depending heavily on one market.

"The industry has become extremely cautious of the fact that they have to diversify as a strategy to de-risk," Sahai said. "And from that perspective, I think it's a very good lesson the US tariff war taught us."

India steps up trade diversification

New Delhi has accelerated trade negotiations with other economies as uncertainty over the US relationship continued. India signed a trade deal with the UK that came into effect in July and has also reached agreements with the European Union, Oman and New Zealand.

The government has added around 500 new product lines to its export basket, mainly across electronics, engineering and marine products.

"The focus is on engaging with economies that collectively account for over two-thirds of global GDP," Commerce Secretary Rajesh Agrawal said.

"In an environment of global uncertainty and shifting trade patterns, FTAs also serve as institutional anchors for trusted economic partnerships," Agrawal said.

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China exports surge 42%

Some newer markets are already gaining ground. Australia has emerged as one of India's faster-growing destinations, while the UAE ranked second among India's export markets during the 12 months through July.

Exports to China also rose sharply, increasing 42% during the period to $21.5 billion. However, that remained well below the $88.5 billion worth of goods India exported to the US.

India has also signed terms of reference with the Southern African Customs Union to speed up trade negotiations, with further efforts underway across Latin America, the Middle East and Africa.