Trade diversification softens tariff hit
New Delhi, Oct. 17 -- India's strategy of trade diversification and its commodity-focused, country-specific export promotion drive considerably helped it in mitigating the adverse impact of high US tariffs on Indian goods last month while delivering double-digit annualised growth in exports to Spain, Brazil, China, Germany, Italy, the UK, the UAE, Saudi Arabia, Bangladesh and Hong Kong, official data showed.
According to the latest government data released on Wednesday, India saw positive growth in exports of 27 out of 30 major commodities and its shipments to 13 out of top 20 key export destinations saw a jump in September, the first full month in which Indian goods took a hit of 50% additional US tariffs .
The country's merchandise exports in September 2025 increased by 6.75% to $36.38 billion compared to $34.08 billion in September 2024 despite its shipments to the US seeing a 11.93% dip to $5.47 billion in the month as compared with $6.21 billion in the same month the previous year. Much before the imposition of additional US tariffs from August 7, India was pursuing a four-pronged trade strategy -- product-wise and country-wise export diversion, import substitution, export promotion, and fast-tracking of free trade agreements (FTAs).
The strategy saw an over 150% jump in India's merchandise exports to Spain to $987.73 million in September 2025 as compared to $393.81 million in the same month last year. India's exports to China saw an over 34% annualized increase to $1.47 billion in September 2025. Exports to Brazil rose about 26% to $749.94 million in the said period. India, which recently signed an FTA with the United Arab Emirates (UAE), posted an over 24% year-on-year jump in exports to $3.57 billion this September. Similarly, it saw over 11% growth in exports to the UK ($1.10 billion) and Germany ($974.19 million); 23% rise for Bangladesh ($1.06 billion), over 14% with Saudi Arabia ($941.60 million), and 18% in the case of Hong Kong ($1.11 billion).
Out of India's 20 key export destinations, contractions have been reported in seven during September 2025 as compared with the same month the previous year, including about 11.93% dip in exports to the US. Other six destinations to witness anualised contraction in September 2025 were: Netherland (20.22% dip to $1.6 billion), Singapore (25.03%, $626.32 million), Nepal (15.64%, $515.61 million), France (28.16%, $536.01 million), Belgium (about 5%, $526 million) and Malaysia (4%, $562.09 million).
According to a quick analysis of provisional trade data for the first half (H1) of 2025-26 (FY26) by the commerce ministry on Wednesday, 24 countries with total exports of $129.3 billion recorded positive growth in April-September 2025 as compared to same period in the previous fiscal year, registering 59% of country's total exports in H1 of FY26. Only 16 countries recorded negative growth during this period (H1 of FY26) with total exports of $60.3 billion, about 27% of India's total exports. India's merchandise exports in April-September 2025 (H1 of FY26) increased by 3.02% to $220.12 billion as compared to $213.68 billion in April-September 2024.
The ministry's commodity-wise analysis showed that 22 commodities with total exports of $162 billion recorded positive growth in H1 of 2025-26 as compared to the same period of the previous fiscal year, accounting for a share of 73.5% of the country's total exports.
Some of them were electronics goods (41.94% annualized growth), cereals other than rice (27.78%), meat, dairy and poultry (22.59%) and marine products (17.4%). Nine commodities recorded negative growth in this period (April-September 2025) with a total value of $58 billion, about 26.4% of the country's total exports. These commodities include iron ore (34.43% annualized dip), petroleum products (16.41%) and oil meals (16.21%)....
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