India’s exporters are seeking to diversify beyond the US as Washington gains authority to impose tariffs of up to 100 per cent on countries trading with Russia
Indian exporters are preparing for possible disruption to shipments to the United States after President Donald Trump signed legislation allowing tariffs of up to 100 per cent on imports from countries trading with Russia, including India. However, the law does not automatically impose a new duty, with the final rate, products covered and implementation timeline still to be decided by Washington.
The uncertainty comes as the US remains India’s largest export destination, accounting for about 20 per cent of the country’s exports. Exporters say the potential impact will depend on how the legislation is implemented and whether particular sectors or products receive exemptions.
Industry groups are nevertheless looking towards market diversification. The Gem & Jewellery Export Promotion Council said new markets opened through trade agreements could help cushion any decline in US shipments. India has already implemented free trade agreements with the UK and Oman, while a pact with New Zealand is expected to take effect soon. An India-EU free trade agreement is also expected to be signed in December.
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Economists caution that alternative markets may reduce, but not completely absorb, the impact of a sharp fall in exports to America
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Previous tariff measures provide an indication of the potential pressure
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During the six months from September 2025 to February 2026, when a 50 per cent US duty was in force, India’s average monthly exports to the US fell to $6.5 billion from $8.1 billion in the preceding six months
Despite this, exports to the US for the full 2025-26 financial year remained broadly stable at $87.31 billion, compared with $86.51 billion a year earlier.
The tariff issue is also expected to feature in India-US trade discussions around the G20 Trade Ministers’ meeting on September 30 and October 1. New Delhi has maintained that any bilateral trade agreement should provide Indian exporters with a tariff advantage over competing economies.
