India Eyes New Export Horizons Amid US Tariff Tensions
By Sanjeev Oak
Faced with what it calls Washington’s “arm-twisting” on trade, India has drawn a clear line: no compromise on core economic interests, and no bowing to unilateral tariff pressures.
In a move aimed at insulating its exporters from the impact of US duties, New Delhi has set up a high-level inter-ministerial committee to identify and eliminate bottlenecks in outbound trade. The panel will include senior officials from commerce, finance, industry, textiles, agriculture and external affairs ministries, as well as state governments, industry bodies and trade experts.
“India will not sacrifice the interests of its farmers and dairy producers,” Prime Minister Narendra Modi has told the US in no uncertain terms.
A Strategic Counter to Pressure
At the heart of the dispute is Washington’s decision to impose selective import tariffs on Indian goods — a tactic seen by New Delhi as an attempt to force concessions in broader trade negotiations. The new committee’s remit is to reduce the direct and indirect damage to India’s exports, especially in sensitive sectors.
Significantly, Modi has made it clear that India’s ongoing trade with Russia will not be halted “under any circumstances.” Russia is a key supplier of energy and defence equipment to India, including the Su-57 fighter jets — a choice that reportedly irked Washington after New Delhi declined to consider the American F-35.
The US response, officials here believe, has been two-pronged: punitive tariffs and a tilt towards Pakistan, despite what India calls Islamabad’s “proven sponsorship of terrorism”.
Sectoral Impact
The brunt of the tariffs is expected to be felt in pharmaceuticals, textiles, automobiles, engineering goods, agriculture, and IT services. While the scale of impact will depend on the specific duties and targeted products, analysts agree that India’s competitiveness in these areas is under strain.
“In this climate, speed, transparency and cost-efficiency in export processes are no longer optional — they’re essential,” a senior trade official told The Indian Express.
The high-level panel will look at:
- Reducing delays in the export clearance process
- Aligning often-contradictory rules between ministries
- Streamlining export incentives, duty drawback schemes and financing options
- Providing urgent relief to sectors hit hardest by the tariffs
- Identifying alternative markets to reduce over-reliance on the US
Building the Alternative Path
India has already begun expanding digital trade portals to speed up export approvals, including enhancements to the ICE-Gate customs platform. Steps have been taken to simplify tax and duty refunds, increase container handling capacity at major ports, and improve road/rail connectivity through dedicated freight corridors.
On the diplomatic front, India is pursuing new and upgraded Free Trade Agreements with ASEAN, the European Union, the UAE and the UK, while also deepening access to African markets. Support schemes for micro and small exporters — including training, credit guarantees and subsidies — are in the pipeline.
Resilience in Numbers
According to the Chamber of Commerce, the overall hit from US tariffs is expected to be contained — a mere 1.87% drop in exports and 0.19% of GDP. While the textile industry may feel the sting, emerging market access is likely to cushion the blow.
The global “China+1” supply chain strategy, which encourages diversification away from China, positions India advantageously. An SBI report notes “huge scope” for growth in chemicals, textiles and agricultural products, offering a platform for “Brand India” to expand its global footprint.
A Long-Term Play
The Modi government’s flagship ‘Make in India’ and ‘Atmanirbhar Bharat’ programmes are already boosting production capacity. A ₹20,000-crore export promotion policy has been announced to support this drive.
“This committee is not just a shield; it’s a launchpad for India’s export ambitions,” says a senior commerce ministry source.
If its plans materialise, India aims to emerge as a $2-trillion export economy in the coming years — turning the tariff challenge into an opportunity for strategic realignment and market expansion.