Jumping hurdles: How India managed to diversify exports in the face of US tariffs, Pg9

Key Highlights:

• US tariffs on Indian goods decreased to 18% from 50% following a trade agreement.
• India's overall exports jumped 19% in November, with exports to the US increasing by 22%.
• Gems and jewellery exports to the US fell 76% in September, but overall exports only dipped 1.5%.
• Auto component exports to the US dropped 12% in September, but total exports grew 8%.

Detailed Insights:

• The imposition of 50% tariffs on August 27 initially caused a decline in Indian exports during September and October.
• India responded by actively pursuing trade deals with the EU, UK, Oman, and New Zealand.
• The Commerce and Industry Ministry has resumed trade talks with Canada and Israel to further diversify trade partnerships.
• Gems and jewellery exports shifted towards the UAE, Hong Kong, and Belgium to offset losses in the US market.
• Marine product exports increased due to higher demand from China, Japan, Thailand, and the European Union.
• Low-margin, labor-intensive sectors like cotton garments and leather footwear struggled to diversify, facing competition from China and ASEAN countries.
• Sports goods exports, heavily reliant on the US market, experienced a 6% decline in October due to the tariffs.
• An SBI Ecowrap report indicated that India's export diversification efforts are helping to mitigate the impact of US tariffs.
• India's total merchandise exports increased by 2.9% between April and September, with cumulative exports to the USA growing by 13%.

Key Concepts Involved:

• Tariffs: Taxes imposed on imported or exported goods.
• Export Diversification: Strategy to expand into new markets and product categories.
• Preferential Trade Agreement: An agreement that reduces trade barriers between participating countries.