The 50 percent tariff imposed by the United States on several Indian product categories from 27 August 2025 initially triggered concern among Indian exporters, who have long considered the American market a primary destination. However, within weeks, many industries rebounded by shifting their export focus to other countries, turning a potential crisis into a strategic realignment of trade.
Exports of gems and jewellery, especially cut and polished diamonds, experienced an initial setback in the US market, but exporters quickly rerouted shipments to other regions. Exports to the UAE climbed by nearly 79 percent, with additional growth recorded in Hong Kong and Belgium. This offset a significant portion of the decline in US-bound shipments.
A similar adjustment was seen in automotive components. Despite a 12 percent drop in exports to the United States, Indian manufacturers pushed sales to Germany, Thailand and the UAE. These redirected shipments helped global exports of auto-components achieve an overall rise of nearly 8 percent, reflecting India’s growing market versatility.
The seafood sector, another area affected by the tariff shock, showed strong resilience. Marine-product exports rose by around 25 percent in September and by 11 percent in October. Major gains were recorded in China, which saw a 60 percent increase in imports of Indian seafood, as well as in Japan and Thailand, along with several EU markets.
Trade experts say that while the tariff move by Washington was disruptive, it ultimately accelerated India’s efforts to diversify away from reliance on a single market. However, some labour-intensive sectors such as textiles, leather goods, footwear and carpets continue to face competitive pressure and price-sensitivity challenges.
Overall, the Indian export ecosystem responded to the US tariff shock with agility, shifting trade patterns across multiple regions. The experience has underscored the importance of supply-chain flexibility and market diversification, and has in many cases resulted in stronger and more varied export partnerships for India.