India Faces Potential Export Decline from US Tariffs but Seeks Stability through Trade Diversification

Proposed reciprocal tariffs by the US could impact India's trade surplus, with agriculture and manufacturing exports particularly vulnerable.

US President Donald Trump plans to implement reciprocal tariffs targeting nations with trade surpluses, including India, starting April 2.
India's exports to the US could decline by 3-3.5%, but diversification efforts and manufacturing goals may offset the impact, according to SBI Research.
The proposed tariffs could significantly affect India's agricultural exports, which currently benefit from high domestic tariff protection.
India is leveraging Free Trade Agreements (FTAs) and exploring alternative trade routes to strengthen its global trade position.
The US remains a key trading partner for India, with bilateral trade exceeding $119 billion in FY24 and a merchandise trade surplus of $35.32 billion.