India’s export profile is undergoing a notable shift, with the share of the US in the country’s merchandise shipments declining steadily since July 2025, even as exports to several other markets rise, according to a new report by SBI’s Economic Research Department. The analysis shows that destinations such as the UAE, China, Vietnam, Japan, Hong Kong, Bangladesh, Sri Lanka and Nigeria have emerged as key markets across multiple product categories in FY25, signalling a broadening of India’s export base.
The report highlights that some of these countries may be re-exporting Indian goods to the US. For instance, Australia’s share in US imports of pearls and precious stones has surged to 9 per cent in January–August 2025 from 2 per cent a year earlier, while Hong Kong’s share doubled to 2 per cent during the same period. Interestingly, this comes at a time when overall US imports of these commodities recorded a decline in August.
The export diversification coincides with the US imposing steep 50 per cent tariffs on Indian goods. Despite this, India’s total merchandise exports rose 2.9 per cent to $220 billion in the first half of FY26, while exports to the US grew 13 per cent to $45 billion — a trend the researchers attribute partly to frontloading ahead of the tariff rollout.
However, the US share in India’s total exports dropped sharply to 15 per cent in September 2025 from 19.8 per cent in FY25, while the UAE, China and Hong Kong gained ground. The SBI economists cautioned that the tariff shock has hit labour-intensive sectors such as textiles, jewellery and seafood, particularly shrimp, which operates on thin margins.
To ease the strain, the government has cleared support worth ₹45,060 crore, including ₹20,000 crore in credit guarantees to improve liquidity, ensure smoother operations, and help exporters tap new and emerging markets.
