India is expanding its export focus to 50 countries, including key markets in West Asia and Africa. This move by Indian govt. can be deemed as the strategic move to lessen dependence on any single buyer and cushion the blow from steep US import tariffs.
As per the reports by a credible media company, these markets together account for about 90% of India’s total exports. No doubt, it will leave India at a point of almost zero impact from US Tariff. The move is directly related to India’s agricultural exports, including rice and other agri-based products. Diversifying exports market will help agriculture remain resilient despite shifting global trade dynamics.
The Policy Shift
As per the details obtained from a media source, “The Ministry of Commerce and Industry is conducting a detailed, product-by-product review to identify India’s competitive strengths and benchmark them against global competitors. Furthermore, this process involves close coordination with export promotion bodies to develop market-specific strategies.”
Worthless to say the urgency to expand export strategy has taken pace after the US decision to raise duties on Indian imports from 25% to 50%, that is equal to Brazil’s rate marking the highest tariff level for any country. The first 25% hike took effect last week, while the additional 25% will apply from August 27. Sectors such as textiles, leather, marine products, gems and jewellery are expected to face the sharpest impact.
Indian rival exporters have also faced tariff however significantly lower than India. Indian rival exporters such as Turkey, Vietnam and Thailand face significantly lower duties of 15%, 20% and 19% respectively, making Indian products less competitive in the US. “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 of the Gem and Jewellery Export Promotion Council.