Canada and Mexico could potentially absorb nearly 63% of India’s exports currently headed to the US, creating alternative markets for Indian exporters facing uncertainty in the American market.
The assessment highlights the potential for Indian businesses to diversify their export destinations by increasing shipments to the two North American markets. Such diversification could help exporters reduce their dependence on the US and manage risks arising from changes in trade policies, tariffs and market conditions.
Canada and Mexico have established trade links with the US and are integrated into North American supply chains. Their proximity to the US market could also provide Indian exporters with opportunities to participate indirectly in regional value chains.
Sectors with established demand in Canada and Mexico could see greater opportunities for Indian suppliers, particularly in areas such as engineering goods, pharmaceuticals, textiles, chemicals, machinery and other manufactured products.
However, redirecting shipments from one market to another would depend on product-specific demand, tariffs, regulatory requirements, logistics costs and the competitiveness of Indian products in each market. Exporters would also need to assess whether the two markets have sufficient capacity to absorb additional volumes across individual product categories.
The potential highlighted by the assessment underscores the importance of market diversification for India’s export sector. Expanding trade with Canada and Mexico could provide Indian companies with additional avenues to sustain overseas sales while reducing concentration in a single market.