Can US tariffs push India to quietly rebalance its export engine

US tariffs of up to 50 percent on Indian goods have cut exports to the US by about 28.5 percent in just five months, from 8.83 billion dollars in May 2025 to 6.31 billion dollars in October. So labour intensive sectors like textiles, garments, leather and marine products are seeing falling orders and job stress in hubs such as Tiruppur, Panipat and coastal Andhra. Yet, in the same April to November 2025 period, India’s total exports of goods and services still touched around 562 billion dollars, growing over 5 percent year on year, so the wider export engine is holding course.

So exporters and policymakers are responding by leaning on newer markets and older routes together, instead of surrendering market share. For example, India’s exports to the US slid to about 6.87 billion dollars in August 2025 from over 8 billion dollars in July, but shipments to the UAE and Netherlands rose in the same month, showing an active shift in orders. And between April and September 2025, exports to partners such as the UAE, China, Spain and Hong Kong recorded strong growth, which shows that India is pushing deeper into friendly and regional markets.

At the same time, traditional partners like the UAE are turning into key hubs again, with India exporting nearly 36.6 billion dollars of goods there in FY24, ranging from engineering items worth 8.28 billion dollars to gems, petroleum products and electronics. So sea routes across the Arabian Sea and through the Indian Ocean link these flows to Europe and Africa, giving Indian exporters more options when a major market like the US turns unpredictable. Over time, this mix of data led diversification and revived trade corridors can soften the blow of harsh US tariffs, even if some sectors will need targeted support, skilling and easier credit to stay competitive.