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The sharp 50 percent tariffs imposed by US President Donald Trump on Indian goods beginning August 27 have set off a period of intense adjustment for India’s export ecosystem. While the US has long been one of India’s most important destinations, the new duty structure has disrupted trade flows, forcing exporters to recalibrate their strategies.

Amid mounting uncertainty, a clear pattern has emerged: several high-value sectors have begun redirecting shipments to Asian and European markets, softening the immediate blow. Others, especially low-margin and labour-heavy industries, continue to bear the brunt of reduced US access.

Major Sectors Find Lifelines in New Markets

Gems and Jewellery Shift Toward the Middle East and Europe

India’s traditionally strong gem and jewellery industry was hit hard in the US market, with a steep 76 percent year-on-year decline in shipments in September. Yet, the sector managed to avoid a full-scale collapse. Exports to the UAE surged 79 percent, while Hong Kong and Belgium recorded increases of 11 percent and 8 percent respectively. These alternative destinations helped keep the overall dip to just 1.5 percent.

Auto Components Gain Strength Through Wider Global Reach

Auto component exports to the US fell 12 percent in September, but the sector showed remarkable resilience. Higher orders from Germany, Thailand and the UAE drove an overall 8 percent increase in exports. Stronger demand for precision-engineered parts in Asia and Europe has partly offset the tariff-induced slowdown.

Marine Products Emerge as a Standout Performer

Marine shipments, especially shrimp, have shown exceptional momentum. Exports grew 25 percent in September and 11 percent in October, driven by rising demand from China, Japan, Thailand and the European Union. These markets have become crucial anchors as exporters diversify away from the US.

Low-Margin Sectors Struggle to Fill the US Gap

The redirection has been far less effective for industries already operating on thin margins.

Sports Goods and Cotton Garments Face Persistent Pressure

Sports goods manufacturers have suffered significantly, with nearly 40 percent of their exports historically heading to the US. The tariffs pushed overall exports down 6 percent in October, with limited success in reaching new markets.

Cotton garment exporters face fierce rivalry from Vietnam and Bangladesh. Despite growing shipments to the UAE, Italy, Spain and Saudi Arabia, overall exports still declined 6 percent in September due to a dramatic 25 percent fall in US-bound consignments.

Leather Footwear Squeezed by Global Competition

Leather footwear exports also felt the strain, dropping 10 percent overall as US shipments contracted sharply. Competitors across ASEAN and East Asia have quickly taken advantage of India’s reduced footprint in the US market.

Government Pushes Fast-Track Diversification to Soften Losses

Realizing the urgency of expanding market access, the government has stepped up its intervention—particularly in sectors like marine products. The number of Indian seafood units cleared to export to the European Union has risen by 25 percent since the tariff hike, with 102 new approvals. Prior to this, 502 units were authorised but many applications had been pending for years.

These additional approvals are expected to boost exports to the EU by 20 to 25 percent. Given Europe’s stringent quality norms, better access to the bloc is likely to strengthen India’s reputation globally and open doors to other key markets.

Diversification Is Working—But Only Partially

While diversification efforts are showing results, the scale remains limited. Officials estimate that only about $2 billion worth of exports can realistically be redirected in the short term—far below the more than $8 billion previously shipped to the US annually.

Shrimp exporters, who send about two-thirds of India’s seafood shipments abroad, remain especially vulnerable. Their margins are thin, and competitors like Ecuador and Indonesia have already raised their prices, keeping Indian consignments competitive but not fully secure.

Exporters have also been advised against slashing prices too aggressively in new markets, as this could weaken India’s long-term bargaining power.

Relief Measures Aim to Support Exporters Through Turbulence

To cushion the impact, the government has rolled out a support package worth ₹45,060 crore. This includes ₹20,000 crore in credit guarantees to help exporters access bank loans more easily. A scheme announced in the Union Budget has also been operationalised, providing additional financial steps to assist affected sectors.

Meanwhile, trade officials see future hope in the India-EU Free Trade Agreement negotiations. Once finalised, tariffs—currently around 12 percent on certain seafood items—are expected to fall, offering valuable relief.