Daybreak Can Trump's tariffs push India to rewire its global trade?
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Aug 28, 2025 U.S. tariffs have doubled, impacting $60 billion in Indian exports, leading to fears of massive job losses. This shake-up reveals India’s overreliance on the American market, creating a significant opportunity for transformation. As factories idle and growth projections falter, there’s a call for strategic diversification of trade partnerships. With the U.S. set to become India’s largest export market, innovative approaches are being discussed to navigate these geopolitical challenges and bolster resilience in the export ecosystem.
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US Tariffs Expose Export Dependence
- Two-thirds of India's exports to the US are now under a 50% tariff, hitting labour-heavy sectors like textiles and gems hardest.
- This dependence has created a 'comfort trap' that left exporters dangerously exposed to sudden policy shocks.
Labour-Intensive Sectors At Immediate Risk
- Textiles, gems and leather face order cancellations and production stoppages as costs jump and competitiveness falls overnight.
- Shipments to the US could fall over 40%, risking hundreds of thousands of jobs and trimming GDP growth forecasts.
India Chose Concentration Over Diversification
- India's share of exports to the US rose to nearly 20% by 2024, reflecting growing reliance rather than diversification.
- China reduced its US exposure over the same period, highlighting a contrasting strategic approach to trade risk.