 "Indian exporters redirect shipments to Asia and Europe as steep US tariffs hit key sectors: Report")
As steep 50 per cent tariffs imposed by US President Donald Trump from August 27 begin to weigh on Indian exports, several sectors — including shrimp, gems and jewellery, auto components and electrical machinery — have managed to divert part of their shipments to alternative Asian and European markets, The Indian Express reported.
Citing Commerce and Industry Ministry data, the report notes that while gems and jewellery exports to the US plunged 76 per cent in September year-on-year, overall exports of the category slipped only 1.5 per cent, cushioned by sharp increases in shipments to the UAE (up 79 per cent), Hong Kong (11 per cent) and Belgium (8 per cent).
A similar pattern is visible in auto components. Exports to the US dropped 12 per cent in September, but higher shipments to Germany, the UAE and Thailand pushed overall auto component exports 8 per cent higher. Marine products also registered strong growth — up 25 per cent in September and 11 per cent in October — driven by rising demand in China (up nearly 60 per cent), Japan (37 per cent), Thailand (around 70 per cent) and the EU.
These shifts underline how India’s trade links across Asia and Europe are helping soften the impact of reduced access to the US market, even as the prospects of an early trade deal with Washington DC remain uncertain. But the effect is uneven. Low-margin, labour-intensive sectors — including cotton garments, sports goods, carpets and leather footwear — continue to struggle amid intense competition from China and ASEAN economies and weaker financial capacity among smaller units.
Sports goods, nearly 40 per cent of which are exported to the US, have failed to find alternative buyers; the higher tariffs dragged overall exports down 6 per cent in October. The cotton garments sector, already facing tough competition from Vietnam and Bangladesh, also struggled to diversify. Despite higher shipments to the UAE, Spain, Italy and Saudi Arabia, overall exports in the category fell 6 per cent in September following a 25 per cent drop in US-bound shipments. Leather footwear saw a similar squeeze, with a 10 per cent fall in total exports after a sharp decline in shipments to the US.
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View AllTo cushion the tariff impact, the government has intensified its push for diversification, particularly in marine products. Since the tariff hike, the number of Indian marine units cleared to export to the EU — India’s second-largest seafood market — has risen 25 per cent, with 102 additional units receiving approval. Prior to this, 502 units were authorised to supply to the bloc, with many pending clearances stuck for years.
The bigger picture: diversification remains a work in progress
The US tariff measures have forced exporters to expand aggressively into new geographies. Officials estimate that diversification can redirect only about $2 billion worth of exports — well below the $8-plus billion earlier shipped to the US — but say it remains a vital buffer. Shrimp exports, worth $4.88 billion in FY25 and accounting for over 65 per cent of India’s seafood exports, remain especially vulnerable due to their low margins.
Exporters have been advised not to sharply cut prices while scouting new markets, as this could undermine India’s long-term market position. Some shipments are still headed to the US as buyers replenish stocks, but these are gradually being replaced by competitors in Central America and East Asia, particularly Indonesia (19 per cent tariff) and Ecuador (15 per cent). Both countries have reportedly raised prices, keeping some Indian consignments competitive.
Further relief may come from the EU, where tariffs — currently around 12 per cent — are expected to fall once FTA negotiations conclude. India exported $1.1 billion worth of seafood to the EU in FY24, and the new approvals could raise exports to the bloc by 20–25 per cent. Given the EU’s stringent quality and safety standards, access to this market is often seen as a gateway to other regions.
To support exporters, the government has rolled out ₹45,060 crore in assistance, including ₹20,000 crore in credit guarantees for bank loans, and has operationalised a scheme announced in the Union Budget.
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