India is expanding its export outreach to 50 countries including in West Asia and Africa to reduce reliance on any single market and mitigate the risks of trade disruptions amid the steep 50% tariffs imposed by the US.
These 50 countries account for about 90% of India's exports. The ministry of commerce and industry is working product by product to improve India's exports competitiveness, officials said.
"The idea is to tap top 50 countries and look at each product and the competitors. India must mitigate risks to improve manufacturing and export competitiveness," said an official. This exercise to explore alternative markets is being done with export promotion bodies and is crucial as India's merchandise exports in June were flat at $35.14 billion.
Last week, the US doubled the tariffs on its imports from India to 50% at par with Brazil and the highest on any country in a move marking an escalation of trade tensions between the two countries.
While the initial 25% duty came into effect last week, the additional 25% is effective August 27. Sectors such as marine products, textiles, leather, gems and jewellery, are expected to be severely hit by the tariffs.
What adds to the concern is that competing manufacturing hubs such as Turkey, Vietnam and Thailand face significantly lower tariffs of 15%, 20% and 19% respectively, making Indian products relatively less competitive in the US market.
"The Indian gem and jewellery sector, in particular, stands to be severely impacted. The US is our single largest market, accounting for over $10 billion in exports-nearly 30% of our industry's total global trade. A blanket tariff of this magnitude is severely devastating for the sector," said Kirit Bhansali, chairman, GJEPC
The government is also working on a strategy to safeguard India's exports from American tariffs. This includes offering tailor-made schemes under the proposed Export Promotion Mission for the affected sectors, diversion of goods to other geographies, and identifying products with less export orders that could be diverted to meet the domestic demand.
The government was already focusing on 20 countries to increase exports but now 30 more have been included in the strategy.
Bhansali also said that the possibility of trade rerouting through low-tariff destinations such as Mexico, Canada, Turkey, UAE, or Oman-undermining the spirit of legitimate trade and impacting transparency, is another concern.
These 50 countries account for about 90% of India's exports. The ministry of commerce and industry is working product by product to improve India's exports competitiveness, officials said.
"The idea is to tap top 50 countries and look at each product and the competitors. India must mitigate risks to improve manufacturing and export competitiveness," said an official. This exercise to explore alternative markets is being done with export promotion bodies and is crucial as India's merchandise exports in June were flat at $35.14 billion.
Last week, the US doubled the tariffs on its imports from India to 50% at par with Brazil and the highest on any country in a move marking an escalation of trade tensions between the two countries.
While the initial 25% duty came into effect last week, the additional 25% is effective August 27. Sectors such as marine products, textiles, leather, gems and jewellery, are expected to be severely hit by the tariffs.
What adds to the concern is that competing manufacturing hubs such as Turkey, Vietnam and Thailand face significantly lower tariffs of 15%, 20% and 19% respectively, making Indian products relatively less competitive in the US market.
"The Indian gem and jewellery sector, in particular, stands to be severely impacted. The US is our single largest market, accounting for over $10 billion in exports-nearly 30% of our industry's total global trade. A blanket tariff of this magnitude is severely devastating for the sector," said Kirit Bhansali, chairman, GJEPC
The government is also working on a strategy to safeguard India's exports from American tariffs. This includes offering tailor-made schemes under the proposed Export Promotion Mission for the affected sectors, diversion of goods to other geographies, and identifying products with less export orders that could be diverted to meet the domestic demand.
The government was already focusing on 20 countries to increase exports but now 30 more have been included in the strategy.
Bhansali also said that the possibility of trade rerouting through low-tariff destinations such as Mexico, Canada, Turkey, UAE, or Oman-undermining the spirit of legitimate trade and impacting transparency, is another concern.
