Exports to US fall: Marine, auto, jewellery find new markets

Exporters have also been asked to explore Russia as an alternative market, and there is a likelihood of 25 fishery units in India being cleared to supply to that country, a government official said.
Officials reckon these such diversification efforts have their limitations, with only an estimated $2 billion worth of exports likely to be redirected to newer markets, as against shipments of over $8 billion to the US before the tariffs kicked in. But they said these modest efforts do provide a much-needed impetus for market diversification. Particularly hit by the US tariffs are India’s shrimp exports, which in FY25 were $4.88 billion, accounting for over 65 per cent of the total seafood exports. Shrimp exports are generally low-margin shipments, official data showed.

Exporters asked to avoid lowering prices

It is learnt that the Department of Commerce has asked exporters not to lower prices sharply as they scout for new markets, as this can impact India’s positioning in these markets. There are still some shipments going to the US as buyers seek replacement stocks, but these are slowly being replaced by other countries in Central America and East Asia, with Indonesia and Ecuador among the top gainers. US tariffs on Indonesia and Ecuador are currently much lower at 19 per cent and 15 per cent, respectively. But these countries are also learnt to have raised prices, which still leaves Indian exports competitive in some segments. Tariffs to the EU are likely to come down from around 12 per cent after the FTA negotiations are wrapped up, which could provide a leg up to EU shipments. In FY24, India’s seafood exports to the EU stood at $1.1 billion, and the fresh registrations could provide a 20–25 per cent uptick in fishery exports to the bloc. The EU is a market with high safety and quality assurance systems, and a clearance is generally seen as an extremely favourable factor in terms of gaining market access in other geographies. To support the exporters, the government has approved Rs 45,060 crore in support, including Rs 20,000 crore in credit guarantees on bank loans, and has operationalised a scheme announced in the Budget.

Diversification is helping Indian products

SBI’s Ecowrap report last week said that India’s exports are finding alternatives and that diversification could help India withstand the US tariff hit over a period of time. The report said India’s total merchandise exports between April and September this year inched up by 2.9 per cent, and cumulative exports to the USA also registered a growth of 13 per cent during the same period, though there could be some front-loading effects, with September figures for the US registering negative year-on-year growth of 12 per cent.

“Interestingly, the share of India’s merchandise exports to other countries during this period has increased significantly, indicating the diversification of our export basket, with the UAE, China, Vietnam, Japan and Hong Kong, as also Bangladesh, Sri Lanka and Nigeria, among the top destinations across different product categories. So, could it be that some destinations are now exporting more to the USA after procuring from India?” the report said. Australia’s share in US imports of pearls and precious and semi-precious stones has increased to 9 per cent year-to-date in January–August 2025 from 2 per cent during the same period in the previous year. Similarly, Hong Kong registered an increase in share from 1 per cent to 2 per cent during the same period. Meanwhile, US imports of these commodities showed declining growth in August, the report said. The report said that the decline in container shipments from India and China has seen a commensurate rise in shipments from Indonesia, Thailand and Vietnam, indicating rerouting.
“The tariffs have led to a steep drop in container volumes of shipments to the US. The top 10 countries from where the US imports goods registered a decline of 9.4 per cent in October 25 compared to October 24. The highest container decline is from India, at –18.4 per cent, followed by China at –16.3 per cent, while countries like Indonesia, Thailand and Vietnam registered positive growth of 10.1 per cent, 3.6 per cent and 3.6 per cent respectively,” the report said.