India can diversify exports away from US if 100% tariffs imposed, has $200 bn market in 15 other countries: Economist SP Sharma
New Delhi, August 9
India has significant scope to diversify its exports to other countries if the United States imposes tariffs of up to 100 per cent on countries buying Russian crude, with a USD 200 billion market available across 15 other countries for products currently exported to the US, according to economist SP Sharma.
Speaking to ANI, Sharma said India has several alternative export destinations and is not heavily dependent on the US market, even as the two countries share strong trade and economic ties.
"We have another 15 markets where we can export our same products which we are exporting to the US. If the exports to the US are around 87-88 billion dollars in merchandise exports, then we have a large market of 200 billion dollars in another 15 countries in the same products," Sharma said.
He identified the Netherlands, France, the UK, countries in Latin America, Saudi Arabia, the UAE and Nepal among markets where Indian exporters could diversify their shipments.
Sharma said India's exports to the US stood at USD 87.3 billion in 2025-26, compared with USD 86.5 billion in 2024-25, despite tariff-related uncertainty and other global headwinds.
"Despite these headwinds, our exporters were able to show resilience, were able to make increase in their export trajectory because there is a lot of demand in the US for Indian products, we are competitive and we are providing the labour-intensive products to the US," he said.
He further said exports to some alternative markets were expanding faster than shipments to the US.
"If we are growing with US at 10-15 per cent, then our growth rate in exports with other markets is between 20-25 per cent. So I believe we have alternatives and we are not that much dependent on the US economy," Sharma said.
However, he stressed that India continues to have strong economic relations with the US and the two countries are engaged in negotiations for a bilateral trade agreement.
Sharma also argued that tariffs of up to 100 per cent would not benefit either economy and could lead to higher prices for American consumers, given India's position as a competitive, low-cost supplier.
"Trade is always for the welfare, trade is not for the tussles," Sharma said.
"Such kind of announcements are not in favour of US economy too because they will face the inflation," he added, arguing that higher tariffs on Indian products could add to price pressures in the world's largest economy.
Sharma said continued trade engagement between India and the US would be more beneficial for both economies than additional tariff barriers.
— ANI
Reader Comments
While diversification sounds good in theory, we must remember that US is still our single largest trading partner. Building new trade relationships takes years. Also, our exporters have established supply chains with American buyers. We can't just switch overnight. The government should focus on strengthening ties with both US and new markets simultaneously.
Finally someone is talking sense! Trade should be for welfare, not for tussles. US imposing 100% tariffs will hurt their own consumers too because Indian products are cheap and good quality. We have alternatives, they should think about this properly. Bilateral trade agreement is the way forward. 🤝
Interesting perspective. As an American, I see the logic here. Tariffs on Indian goods would increase prices for US consumers who are already struggling with inflation. India has competitive advantage in many sectors. A 100% tariff is extreme and counterproductive. Hopefully, both countries can reach a fair trade agreement soon.
The point about export growth of 20-25% in other markets is very encouraging! We Indian exporters are resilient and adaptive. The government should now focus on improving infrastructure and simplifying export procedures for these emerging markets. Make in India should extend to "Sell to the World"! 🌏
SP Sharma's confidence is well-placed. India's exports are competitive and diverse. But the US remains a crucial partner, especially in the services sector which Sharma didn't mention. IT services and pharmaceuticals are major exports that can't easily be redirected. Let's be realistic about diversification while maintaining strong ties with Washington.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.