In a decisive move to shield Indian exporters from the fallout of steep unilateral tariffs imposed by the United States, the Indian government has unveiled a comprehensive strategy aimed at diversifying export destinations and boosting domestic demand. Commerce and Industry Minister Piyush Goyal confirmed that exporters will now pivot toward new markets, including Australia, Japan, the UK, and key EU nations, as part of a broader recalibration of India’s trade architecture.
The announcement comes amid growing concerns over a potential USD 48 billion hit to India’s outbound trade, particularly in labour-intensive sectors such as textiles, gems and jewellery, leather, and seafood. The government’s response is both tactical and transformative, combining external market expansion with internal demand stimulation.
Key Developments at a Glance
Indian exporters to target 40 strategic countries, including Australia, to offset losses from US tariffs
Export Promotion Mission rollout accelerated, with sector-specific campaigns under Brand India
Domestic demand push includes GST rationalization and MSME liquidity support
Australia signals strong trade alignment with India, opposing US tariff stance
India-Australia trade pact (ECTA) shows 14 percent growth in Indian exports since signing
Strategic Export Diversification
Market Realignment India is actively engaging with 40 countries that collectively import over USD 590 billion in textiles and apparel. These include Australia, Japan, South Korea, Germany, France, and the UAE. The government aims to position India as a reliable supplier of sustainable, high-quality goods across sectors.
Sectoral Outreach
Textile exporters are being mobilized to participate in global trade fairs and exhibitions under the Brand India initiative
Gems and jewellery exporters are exploring increased trade with Hong Kong, Belgium, and the UAE
Shrimp exporters, facing a 60 percent duty hike in the US, are being redirected toward Japan, China, and Spain
Leather and footwear manufacturers are targeting France, Germany, and the UK for expanded access
Australia as a Key Partner Australia’s Trade Minister Don Farrell has publicly opposed the US tariffs and reaffirmed his country’s commitment to deepening trade ties with India. The India-Australia Economic Cooperation and Trade Agreement (ECTA) has already boosted Indian exports to Australia by 14 percent. Talks are underway to expand this into a Comprehensive Economic Cooperation Agreement (CECA), with the goal of reaching AUD 100 billion in bilateral trade by 2030.
Domestic Demand Stimulation
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GST Reforms The government is preparing a Diwali-season GST overhaul to lower prices on consumer goods, thereby boosting demand across urban and rural markets.
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MSME Support Liquidity infusion measures are being considered, including interest subvention schemes and credit guarantees for export-oriented MSMEs.
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Import Substitution Policies are being drafted to reduce dependence on imports in electronics, chemicals, and machinery, with a focus on building domestic manufacturing capacity.
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Ease of Doing Business Reforms in SEZ and EOU frameworks are being fast-tracked to simplify compliance and attract investment into export-oriented units.
Industry Sentiment and Outlook
Industry bodies such as FICCI, ASSOCHAM, and FIEO have welcomed the government’s proactive stance. While acknowledging the challenges posed by the US tariffs, they emphasized India’s resilience and the opportunity to deepen trade ties with emerging markets.
The Federation of Indian Export Organisations noted that while the tariff shock could impact USD 48 billion worth of exports, the government’s diversification and domestic demand strategy could offset much of the damage over the medium term.
Conclusion
India’s trade recalibration is a bold response to a shifting global landscape. By expanding into new markets like Australia and stimulating domestic consumption, the government is not just cushioning the blow—it is laying the groundwork for a more resilient and diversified export ecosystem. As geopolitical tensions reshape global commerce, India is positioning itself to lead with agility and ambition.
Sources: Indian Express, Economic Times, MSN News, Press Information Bureau, Austrade.
