Indian exporters are facing growing challenges in key international markets, particularly the United States and China, as tariff uncertainty and non-tariff barriers complicate trade. These two markets account for approximately one-quarter of India’s overall trade, making market diversification increasingly important.

India’s exports to the United States increased by 11.1% year-on-year during the current fiscal year through September, partly driven by exporters accelerating shipments amid concerns over potential tariff increases. However, uncertainty surrounding US trade policy has affected sectors such as textiles, seafood, gems and jewellery, pharmaceuticals and engineering goods.

Textile exporters have increasingly explored alternative markets to manage tariff-related risks and maintain shipment volumes. Indian seafood exporters have also redirected shipments towards the European Union and China, while the gems and jewellery sector has sought opportunities in West Asia.

Meanwhile, India’s exports to China recorded 36.1% growth, although from a smaller base. Persistent non-tariff barriers and market-access restrictions continue to create difficulties for Indian businesses seeking to expand their presence in the Chinese market.

Free Trade Agreements (FTAs) are emerging as an important tool for diversifying export destinations. Trade agreements with the United Kingdom and Oman are supporting market access, while the India–New Zealand FTA has recently come into force. The India–European Union trade agreement is also expected to become operational in early 2027.

Greater market diversification, improved access to international markets and stable tariff arrangements could help Indian textile and apparel exporters strengthen their global competitiveness. Continued trade engagement with both the United States and China will also remain important for achieving more balanced and sustainable export growth.