India’s new export strategy
The effect of high tariffs imposed by America on Indian products now seems to be gradually fading. India has started expanding its exports from being dependent only on America to many new countries. And this strategy is now paying off.
India’s exports of cotton readymade garments, marine products and other goods declined to the US in the month of September, but increased rapidly to countries like UAE, France, Japan, China and Vietnam. That means India’s export diversification strategy is now giving results on the ground.
American taxes increased, but India changed the path
In August, America had imposed tariff on all goods of Indian origin, first 25% and then doubled it to 50%. In such a situation, it was expected that India’s exports would be badly affected. But the opposite happened, India changed its strategy and focused on new markets. India’s total merchandise exports increased by 6.7% to $36.38 billion in September. Although exports to America decreased by 11.93%, the pace of India’s total exports did not slow down.
According to government data, exports of marine products to America decreased by about 27%, but exports to China, Vietnam and Thailand increased by more than 60%. Similarly, sales of clothes, basmati rice, tea, carpets and leather products declined in America, but their demand increased in other countries.
UAE and Japan become new export centers
UAE, France and Japan have played a big role in the sale of Indian clothes and readymade garments. At the same time, export of Basmati rice to Iran has increased six times. There was a decline in tea sales in America, but the demand for Indian tea has increased rapidly in UAE, Germany and Iraq.
The Government of India has now launched a Global Export Diversification Drive, in which 40 key countries from regions such as Europe, Asia, Africa and Latin America have been identified. India is trying to increase the export of its textiles, handicrafts and technical fabrics in these countries.
Way forward and challenges
Experts believe that this strategy can go a long way, but cheap competition and heavy discounts from countries like China still remain a challenge. Despite this, the focus of the Indian government and industry is now on building a sustainable and diverse export network.