Indian exporters redirect shipments as US tariffs bite
What's the story
Indian exporters are feeling the pinch of the 50% tariffs imposed by US President Donald Trump from August 27. However, several key sectors have managed to mitigate the impact by redirecting their shipments to other Asian and European markets. This includes shrimp, gems and jewelry, auto components, and electrical machinery. The information was reported by The Indian Express citing data from the Commerce and Industry Ministry.
Export decline
Gems and jewelry exports to US plummet
The report highlights a major drop in gems and jewelry exports to the US, which fell by 76% in September year-on-year. However, overall exports of this category only slipped by 1.5%, thanks to a surge in shipments to other countries like UAE (up 79%), HongKong (11%), and Belgium (8%). This shows how Indian exporters are adapting their strategies amid changing global trade dynamics.
Market adaptation
Auto components and marine products see growth
Similarly, auto component exports to the US fell by 12% in September. But higher shipments to Germany, UAE, and Thailand pushed overall auto component exports up by 8%. Marine products also saw a strong surge, up 25% in September and 11% in October, due to rising demand from China (nearly 60%), Japan (37%), Thailand (around 70%), and the EU.
Sector challenges
Low-margin sectors struggle amid competition
Despite these successes, low-margin, labor-intensive sectors such as cotton garments, sports goods, carpets and leather footwear continue to face challenges. This is mainly due to fierce competition from China and ASEAN economies as well as the financial constraints of smaller units. Sports goods exports have been particularly hit by the higher tariffs imposed by the US.
Policy response
Government's push for diversification in marine products
In a bid to mitigate the impact of tariffs, the government is pushing for diversification, especially in marine products. Since the tariff hike, the number of Indian marine units approved to export to the EU has gone up by 25%. Before this move, there were 502 units cleared to supply seafood to this bloc with many pending clearances stuck for years.
Export strategy
Diversification can redirect $2 billion worth of exports
The US tariff measures have prompted exporters to aggressively explore new markets. Officials estimate that diversification can redirect only about $2 billion worth of exports, far less than the over $8 billion that was earlier sent to the US. However, they say it is still a crucial buffer. Shrimp exports, which were worth $4.88 billion in FY25 and made up over 65% of India's seafood exports, remain particularly vulnerable due to low margins.