Trump Tariffs Have Minimal Impact on India’s Export Reliance on the US, Maintaining Share Around 20%
India’s exports to the United States reached $87.31 billion in the fiscal year 2025-26, a slight increase from $86.51 billion in the previous year. The US continues to be India’s largest export market, accounting for approximately 20% of total exports despite significant tariff fluctuations. Tariffs on Indian goods had peaked at 50% but were reduced to 18% in February and currently stand at 10%.
US remains India’s biggest export destination
In the 12 months ending July, India exported goods worth $88.5 billion to the US, compared to $21.5 billion to China. The US share of India’s exports increased from 17.4% in 2022-23, indicating the challenges India faces in diversifying its trade. The UAE and China followed the US as major export destinations, with India exporting $37.37 billion to the UAE and $19.48 billion to China. Notably, exports to China surged by 42% during the same period.
India has broadened its export portfolio, adding around 500 product lines, particularly in electronics, engineering, and marine products. The US remains a crucial market for Indian exports in sectors such as electronics, pharmaceuticals, and textiles. Despite ongoing negotiations, India and the US have yet to finalize a broader trade agreement.
India steps up trade diversification
In response to uncertainties in US trade policy, India is actively pursuing trade agreements with other significant markets. A trade deal with the UK took effect in July, while agreements with the European Union, Oman, and New Zealand are set to be implemented in 2026. Additionally, India has resumed negotiations with various markets, including the Gulf Cooperation Council, Canada, and Israel.
Ajay Sahai, director general of the Federation of Indian Export Organizations, emphasized the need for diversification as a strategy to mitigate risks. He noted that it may take two to three years for the effects of market diversification to materialize, while the US remains the most attractive market for Indian exports. Commerce Secretary Rajesh Agrawal stated that India is focusing on economies that collectively account for over two-thirds of global GDP.
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