“The decline in exports from India to the US could be in the range of 3-3.5 per cent post reciprocal tariffs, if any… which again should be negated through higher export goals across both manufacturing and services fronts, as India has diversified its exports kitty, pitched value addition, exploring alternate areas and works on new routes that transcend from Europe to USA via the Middle-East, redrawing new supply chain algorithms,” the report said.
India is also expected to gain from the aluminium and steel tariffs imposed by the US last week. The country runs a minor trade deficit with the US in these categories, standing at $13 million in aluminium goods and $406 million in steel goods. While India accounts for just 1% of US steel imports, it remains among the top 10 sources for aluminium, though its share has fallen from 3% to 2.8% between 2018 and 2024.
To counter these trade shifts, India has been expanding its export base, improving value addition, and targeting new markets. By utilising alternative trade routes from Europe to the US via the Middle East, the country aims to strengthen its role in global supply chains.
“India has been talking about free trade agreements with several partners – both bilateral and regional – in a bid to boost export-oriented domestic manufacturing,” SBI said.
Over the past five years, India has signed 13 Free Trade Agreements (FTAs), including those with Mauritius, the UAE, and Australia. Talks are ongoing with the UK, Canada, and the European Union, covering sectors such as digital trade, services, and sustainable development. The FTA with the UK alone is expected to increase bilateral trade by $15 billion by 2030.As the digital economy expands, analysts suggest digital trade agreements could contribute an additional $1 trillion to India’s GDP by 2025. Regional supply chain shifts and geopolitical developments, including the US-China trade conflict, are also influencing India’s trade policies.With trade negotiations progressing and the global economic landscape evolving, India’s focus on FTAs, digital trade, and export diversification may help the country navigate challenges and strengthen its global trade position.
(with ANI inputs)
Content Source: economictimes.indiatimes.com