ANALYSIS India’s exports pivot towards Asia, select European markets amid US tariffs

Overall, goods exports rose to $38.51 billion in December, up 1.9 percent on-year.

• Indian exporters shift focus to Asia and Europe amid US tariff hikes
• Exports to China, Malaysia, Hong Kong, and Spain see a big jump in December.
• Engineering goods exports rose 1.3 percent despite higher US tariffs

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Indian exporters appear to be diversifying shipments toward Asia and select markets in Europe to offset tariff pressures from the United States.

In November and December, exports to markets such as China, Hong Kong, Vietnam, Malaysia, Spain, France, and Germany surged, with growth in some destinations exceeding 60 percent compared to the year-ago period.

The US has imposed 50 percent tariff on most Indian exports since mid-2025, prompting an urgent need to diversify into alternative markets.

In December, shipments to the US fell 1.8 percent year-on-year but exports to key markets surged, with China up 67 percent, Malaysia 65 percent, Hong Kong 61 percent, Spain 48 percent, Vietnam 19 percent, Germany 9.8 percent and Belgium expanding 8.9 percent.

Exports to the UAE also grew during the month, reaching $3.5 billion, rising nearly 15 percent year-on-year.

Overall, goods exports grew slower than imports to $38.51 billion in December, up 1.9 percent on-year.

India’s top export to the US, engineering goods, which face steeper tariffs of 25 to 50 percent, also recorded growth during the month.

The total value of engineering goods exports stood at $10.98 billion, rising 1.3 percent compared to $10.84 billion in the same month last year. Pankaj Chadha, Chairman of EEPC India, attributed this performance to India’s growing export diversification into alternative markets.

“Market diversification and policy support by the government have been among the key factors that have helped in maintaining positive growth. This also shows the resilience of the sector and the ability of the engineering community to adapt to emerging situations and navigate the challenges,” Chadha said.

Other key exports, which are among the top ones shipped to the US such as ready-made garments, organic and inorganic chemicals and marine products, also held steady or recorded growth in December.

Marine products surged nearly 12 percent; ready-made garments were up almost 3 percent, and chemicals rose slightly over 1 percent.

To be sure, exports of gems and jewellery and leather products slightly declined, showing that the growth trend is not uniform.

The country-level trade data for December is yet to be released.

In the first nine months of FY26, India shipped $41.65 billion to leading Asian markets, $53.88 billion to top European destinations and $36.69 billion to Middle East and North Africa countries, led by the UAE.

Exports to Oman stood at nearly $3 billion, rising 10 percent, Egypt at $2.7 billion, rising 21 percent, Sudan 71 percent, and Jordan 54 percent. Other MENA countries that showed growth include Morocco, Algeria, Qatar, Lebanon, Libya, Tunisia, and Syria.

However, the trend is not uniform across all regions. For instance, in some European markets, shipments fell during the April–December period, with the Netherlands declining 21.2 percent and Italy down 4.1 percent.

The commerce ministry attributed the decline largely to lower exports of petroleum products.