Indian Strategies for Diversifying Export Markets Amid U.S. Tariff Pressures

India's rising economic power at the international level has presented challenges alongside opportunities to New Delhi.

- By Gaurav Bhagat

One of India's largest and most important export markets, the United States of America, has levied across-the-board tariffs of up to 50% on a variety of Indian commodities. With Washington increasingly employing tariff pressures and protectionist trade measures, India is forced to diversify its export markets, especially in the labour-intensive economy. For this, New Delhi has been working on diversifying dependence, spreading risk, and creating robust trade connections with new markets. Just as its strategic diplomacy in the Global South, India's trade diversification policy relies on balancing partnerships, intensifying regional integration, and offering development models attractive to rising economies.

India’s Diversification Strategy: Moves Underway

Facing growing U.S. tariff pressures, India has responded with a suite of strategic shifts spanning policy reform, infrastructure investment, trade diplomacy, sectoral reorientation, and targeted relief for exporters. In the realm of policy and institutional measures, export diversification has moved from being a talking point to a central plank of India’s strategy. New changes in the Foreign Trade Policy (FTP) 2023-28 aim to simplify export procedures, improve trade facilitation, and eliminate non-tariff barriers. The government also initiated an “Export Promotion Mission” in the Union Budget 2025-26 with a support of ₹2,250 crore with the objective of providing better access to export credit, enhancing cross-border factoring, and assisting exporters in managing regulatory and cost burdens of trade.