Former Foreign Secretary and Rajya Sabha MP Harsh Vardhan Shringla has said that India needs to expand and diversify its export markets as the country braces for higher tariffs from the United States. From midnight, the U.S. enforced an additional 25% tariff on Indian imports, taking cumulative levies to 50%, a move that could weigh heavily on several sectors.

“We are working on minimising the impact. One way is to find alternative markets,” Shringla said, pointing to India’s growing network of free trade agreements (FTAs). “We have FTAs with Australia, the UAE, and the UK, and we are close to concluding one with the European Union. This means that we can access different markets and would have the opportunity to divert some of our exports in that direction,” he said.

Shringla said that while the U.S. remains India’s most comprehensive and multi-faceted partner, trade headwinds highlight the urgency of hedging risks by tapping into new geographies. “The strength of our relationship with the U.S. lies in shared values and principles, which will see us through any ups and downs,” he added.

Calling the appointment of Sergio Gor as the next U.S. Ambassador to India “a very positive step,” Shringla maintained that long-term ties with Washington remain strong. However, he reiterated that India must leverage its trade agreements to cushion the blow from tariffs and seize new opportunities in emerging markets.

According to Global Trade Research Initiative (GTRI), export of textiles, gems and jewellery, shrimp and a host of other Indian goods could see about 70% dip in their U.S. exports. Overall, India’s exports to the U.S. are set to fall steeply by $37 billion, from $86.5 billion in FY2025 to about $49.6 billion in FY2026, due to Washington’s new tariff regime, an analysis by the Delhi based think tank showed.

The report noted that Diamonds, gold, and jewellery exports will see duties jump from 2.1% to 52.1%, a blow that threatens jobs in hubs like Surat, Mumbai, and Jaipur, while U.S. buyers are expected to turn to Israel, Belgium, China, and Mexico.

According to the think tank, the affected sectors together account for over $60 billion or 66% of India’s exports to the US. The tariffs will render apparel, textiles, gems & jewellery, shrimp, carpets, and furniture exports uncompetitive, it says. “Exports from these sectors could plunge 70%, dropping to $18.6 billion, causing an overall 43% decline in shipments to the US and endangering hundreds of thousands of jobs”, Ajay Srivastava, founder GTRI points out.