India’s exports hold firm despite steep US tariffs as markets diversify: Economic Survey

India’s exports have shown resilience despite facing some of the highest trade barriers in the US market, as exporters increasingly pivot to alternative destinations, the Economic Survey said.

The survey noted that India is currently subject to an effective export tariff rate of about 50 per cent on goods shipped to the US, among the highest imposed on any trading partner. While these tariffs have weighed on select labour-intensive and small-scale sectors, India’s overall export performance has remained stable, supported by diversification across markets.

Data for April–November FY26 indicate a clear divergence between exports to the US and shipments to the rest of the world. Exports to the US declined on a year-on-year basis across several sectors, even as India’s global exports posted positive growth.

On trade with the US, the Survey highlighted that India currently faces an effective export tariff rate of about 50 per cent, among the highest imposed on any country. While these tariffs have had a sector-specific impact, India’s overall exports have shown resilience due to diversification towards alternative markets.

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Data for April–November FY26 show that while exports to the US declined year-on-year across several labour-intensive and small-scale sectors, exports to the rest of the world posted positive growth.

In gems and jewellery, exports to the US fell 44.3 per cent, but global exports rose 0.6 per cent, with strong growth seen in markets such as the UAE and Hong Kong. Marine product exports to the US declined 5.7 per cent, even as shipments to the world grew 16.1 per cent, driven by Asian and European destinations.

Similarly, auto component exports to the US fell 6.8 per cent, while global exports rose 6 per cent, with sharp growth to markets including the UAE, Germany, and Belgium. In textiles and allied products, exports to the US declined 6.1 per cent, but diversification towards Africa, Europe, the Middle East, and East Asia helped offset the impact.

The survey said these trends highlight India’s growing adaptability to global demand shifts, aided by trade agreements such as the India–UAE CEPA and the recently signed India–UK FTA, which are expected to further boost exports in the coming years.

“In sum, India’s external sector enters this phase of global fragmentation with strengthened buffers, diversified trade linkages, and improving resilience,” the survey said, adding that the policy challenge lies in leveraging these strengths to sustain external stability while supporting high growth in a world where global integration is increasingly shaped by strategic, rather than purely economic, considerations.