Donald Trump’s decision to suspend tariffs on most nations for 90 days has given India valuable breathing room to pivot its export strategy.
While trade talks with Washington continue, India is actively working to reduce its dependence on the US — currently the destination for around 18% of its total exports — by strengthening ties with other markets.
Last week, Commerce and Industry Minister Piyush Goyal remarked, "We do not negotiate at gunpoint."
"Timely restrictions are good as they encourage us to talk swiftly, but until we can protect the interests of the country and people, it is never good to be hasty," Goyal told reporters.
Uncertainty over future US trade policy is prompting Indian businesses — particularly in textiles, electronics, engineering goods, gems and jewellery — to revisit their strategies.
The German news website dw.com quoted Mihir Jhaveri, chief revenue officer at AQe Digital, as saying that Indian IT firms were evolving rapidly. He added that companies are proactively diversifying their revenue base.
"We have taken a more deliberate approach by not just shifting geographies but deepening client relevance in key emerging markets such as the UAE, Saudi Arabia, Singapore, Germany and South Africa."
The US remains India's top trading partner, with bilateral goods trade reaching $129.2 billion in 2024. Of that, India exported over $87 billion in goods, while importing $41.8 billion from the US — creating a surplus of $45.7 billion in India’s favour.
Both governments aim to finalise a deal by September or October to more than double trade to $500 billion by 2030.
However, the spectre of retaliatory tariffs has raised concerns. Economist Lekha Chakraborty from the National Institute of Public Finance and Policy warned that such measures could impact Indian manufacturers, including steel producers, and hurt foreign direct investment.
"Regional trade agreements offer a viable solution to mitigate these effects. As India's trade dynamics shift towards neighbouring countries, the 'gravity models of trade' support prioritising trade with countries nearby," Chakraborty told dw.com.
"This crisis presents opportunities for India to bolster neighbourhood ties. By focusing on regional trade, India can reduce its dependence on distant markets and strengthen its economic resilience."
She also highlighted that India’s location and economic heft make it a natural fit for regional pacts that can help offset volatility in US policy.
Nikul Shah, CEO of IndieSemic, said Indian companies are seizing the opportunity presented by global supply chain shifts.
"Many global companies looking for alternatives to China are turning to India, and we are grabbing that chance," she said. "Tariffs may come and go, but the tech growth happening in India right now is phenomenal.
"We are also reducing our reliance on the US by finding new customers in Europe, the Middle East and South East Asia. In electronics, instead of just sending parts, we are building smarter, complete products."
India's $32 billion gem and jewellery industry is also reassessing its exposure to the US and redirecting focus toward markets like the UAE, Latin America and Saudi Arabia.
Kushal Patel, managing director of Axita Cotton, said Indian exporters are no longer waiting for trade tensions to subside.
"In response to the recent US tariffs, Indian manufacturers themselves are changing their export strategies instead of holding out for a delayed resolution to trade," he said.
Patel noted that innovation and value addition are becoming essential for staying competitive under the new global trade dynamics.
Meanwhile, Indian auto part makers are trying to make the most of the temporary tariff pause.
"For the short term, auto part suppliers can look at flying out goods to the US to keep a buffer until prices could be renegotiated. We must look at alternative markets, but that will be challenging as many firms will be doing the same," said Dilip Chenoy, former director general of the Society of Indian Automobile Manufacturers.
"Ultimately, we must strive to be leaders in technology and innovation. It is a tough and difficult road but doable," added Chenoy.
In February, Prime Minister Narendra Modi met Trump at the White House, where both sides reaffirmed the importance of their bilateral relationship. At the same time, officials in New Delhi are pushing to finalise a trade agreement with the UK, with Trump’s trade stance adding urgency.
"I think both sides realize that we've had quite a lot of discussions, which was well worth it, but now it's the time to conclude [the trade agreement with London]," said Finance Minister Nirmala Sitharaman during her recent UK visit.
