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    BUSINESS & TRADE                                                         APRIL 24, 2026    |  The Indian Eye 34

                                                            TARIFF TREMORS

                            How America’s Trade War Is

               Recasting India’s Export Landscape

               Rising tariffs and shifting demand are forcing India to rethink its trade

                                        strategy as its surplus with the US narrows.

            OUR BUREAU                                                                                            Rajesh Agrawal pointed to the com-
                                                                                                                  pounded  challenges  in  March  2026,
            New Delhi / Dubai
                                                                                                                  stating, “One of the key reasons we
               ndia’s trade equation with the                                                                     don’t need to find reasons also here
               United States is undergoing a                                                                      has  been  the  challenges  on  trade
            Isubtle but significant shift, as tar-                                                                front, due to Middle East crisis… our
            iff measures imposed under President                                                                  exports to Middle East in the month
            Donald Trump begin to ripple through                                                                  of March has dipped by USD 3.5 bn…
            export sectors and reshape long-stand-                                                                In percentage term it has been a de-
            ing patterns. The numbers tell a story                                                                cline of 57.95 per cent.” Imports from
            of  resilience  under  pressure—but                                                                   the region also fell sharply by 51.6 per
            also  of  emerging  vulnerabilities.                                                                  cent, or USD 8.7 billion.
                In  FY  2025–26,  India’s  exports
            to the US inched up only marginally                                                                   These overlapping crises—tar-
            to USD 87.31 billion from USD 86.51
            billion a year earlier. At first glance,                                                              iffs, geopolitical tensions, and
            the  increase  suggests  stability.  But                                                              demand fluctuations—are cre-
            beneath that modest rise lies a slow-
            down in export momentum, widely                                                                       ating a volatile environment
            attributed to tariff barriers and grow-                                                               for Indian trade. While the
            ing uncertainty in the American mar-
            ket. At the same time, imports from                                                                   headline figures suggest that
            the US surged sharply to USD 52.90   Within the gem and jewellery sector, for instance, traditional segments like cut and polished   exports are holding steady,
            billion  from  USD  45.63  billion,  nar-
            rowing India’s trade surplus to USD       diamonds—still accounting for 43.9 per cent of exports (ANI file photo)   the  underlying  pressures  are
            34.41 billion from USD 40.88 billion                                                                  forcing structural adjustments
            the previous year.                    The tariff war’s impact is perhaps   and adapted swiftly to evolving global
                This  shrinking  surplus  reflects  a   most  visible  in  sector-specific  data,  trade dynamics.”  across industries.
            broader imbalance triggered by tariff   particularly in the gem and jewellery   This diversification is already vis-
            distortions. While Indian goods con-  industry—one  of  India’s  flagship  ex-  ible. Exports to the UAE grew over   Within the gem and jewellery
            tinue to find their way into American   port segments. Exports in this sector   22 per cent during most of the year,   sector, for instance, traditional
            markets, the pace has slowed, and US   declined  by  3.32  per  cent  to  USD   while Australia recorded a striking   segments like cut and polished dia-
            products are entering India more ag-  27.72 billion in FY26, a drop largely   38.33  per  cent  increase,  aided  by  fa-  monds—still accounting for 43.9 per
            gressively. The result is a tightening of   attributed to “evolving tariff regimes   vourable  trade  agreements.  These   cent  of  exports—declined  by  8.52
            margins in one of India’s most crucial   in the US, along with global invento-  shifts indicate that Indian exporters   per cent. In contrast, silver jewellery
            bilateral trade relationships.    ry corrections, subdued discretionary   are not merely reacting to tariffs but   exports  surged  by  over  52  per  cent,
                The United States remains India’s   demand, and increasing competition   are actively seeking to de-risk their   driven  by  affordability  and  chang-
            top export destination, but the chang-  from alternative luxury segments.”  global exposure.          ing consumer preferences. Similarly,
            ing dynamics have forced exporters    The United States has tradition-  However, diversification is not an   studded  gold  jewellery  saw  growth,
            to look elsewhere. Countries like the   ally been a major market for Indian   immediate  remedy.  Established  mar-  reflecting a shift toward value-added
            UAE and China have gained promi-  gems and jewellery, and tariff-re-  kets like the US offer scale and sta-  products  that  can  better  withstand
            nence, with exports to China surging   lated uncertainties have dampened   bility that newer destinations cannot   price and tariff pressures.
            to USD 19.48 billion from USD 14.25   demand. Exporters, facing unpre-  instantly replicate. Moreover, Euro-  These  trends  point  to  a  broad-
            billion—a robust 36.7 per cent growth.  dictability in pricing and access, have   pean markets such as the Netherlands   er transformation: Indian exporters
            Yet, this pivot is not without complica-  had to recalibrate strategies. As Kirit   and the UK have shown signs of mod-  are moving up the value chain and
            tions. Imports from China have also   Bhansali, Chairman of the Gem and   eration, adding another layer of com-  diversifying  both  products  and  mar-
            ballooned to USD 131.63 billion, un-  Jewellery  Export Promotion Coun-  plexity to India’s export outlook.  kets. Yet, the transition comes with
            derscoring a persistent structural de-  cil,  noted,  “Exporters  have  active-  The tariff war is also intersecting   costs—investment,  uncertainty,  and
            pendence that offsets gains made on   ly  diversified  into  new  geographies,  with  other  global  disruptions,  ampli-  the challenge of building new trade
            the export front.                 strengthened value-added segments,  fying its effects. Commerce Secretary   relationships.

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