New Delhi: In order to help insulate the output loss on account of higher US tariff rate, India’s export profile has seen a case of frontloading and re-routing of exports following the changing tariff environment, a report showed on Friday.
India’s export basket is undergoing a structural shift in response to 50 per cent US tariffs and the absence of a formal trade deal.
For marine products, significant increase in share of exports is observed for countries such as China and Thailand. For electronic goods, the share has risen for UAE while for Gems and Jewellery, it increased significantly for Hong Kong, according to the Bank of Baroda Report.
“The shares may be small on an individual basis but cumulatively with more focus on diversification, integration with global supply chains, competitive pricing and improved logistics, a stronger substitution effect may to some extent insulate the negative impact of higher tariff rate of the US, till we have a formal trade deal in place,” said Dipanwita Mazumdar, Economist, Bank of Baroda.
During the April-August 2025 period, the frontloading of exports to the US happened at a faster pace to get a cost advantage. The next period, September-November 2025, shows some degree of diversification with exports to the rest of the world excluding US picking up and some trimming down of exports to the US.
However, US continues to be the exports market, said the report.
Going forward, scope for further diversification remains especially for commodities such as readymade garments, gems & jewellery, textiles (excluding readymade garments) and machinery and instruments.
“Thus, these sectors hold significance in terms of targeted policy initiatives to boost export competitiveness. This might help to insulate the output loss on account of higher tariff rate,” the report noted.
Overall, while the US remains a dominant export market, India is gradually building substitution channels through wider geographic outreach to mitigate tariff impact.
(IANS)
