India’s export growth is gaining momentum, driven by the country’s increasing capabilities in high-value sectors like machinery and electronics. Despite ongoing global uncertainties, such as geopolitical conflicts, India’s export performance remains resilient. The gradual recovery of developed markets is also providing an improved outlook for future growth.
Trade experts suggest that India stands to benefit from the potential changes in global trade dynamics, particularly if the new US administration, under President Donald Trump, imposes higher tariffs on China, Mexico, and Canada. Such measures could create opportunities for Indian exporters to capture market share in sectors where trade relationships with these countries are disrupted.
In addition to tariff changes, the potential intervention of the US administration in resolving the Russia-Ukraine conflict could bring about a shift in global trade. A resolution to this conflict could help ease disruptions in global supply chains, reduce shipping costs, and further stabilize trade flows, benefiting exporters worldwide, including in India.
However, challenges remain, particularly concerning Trump's threat to impose reciprocal tariffs on Indian goods. These additional duties could hurt the competitiveness of Indian exports, making it more challenging for exporters to maintain their market position and profitability in the US.
Moreover, the European Union's new green regulations, such as the Carbon Border Adjustment Mechanism (CBAM) and deforestation laws, pose additional hurdles for Indian exporters. These policies could increase export costs, especially for industries with high carbon footprints, and complicate free trade negotiations. Indian businesses may need to adapt to these regulatory changes, which could have significant implications for their competitiveness in the European market.
Despite these challenges, India’s export sector continues to benefit from strategic opportunities in high-value industries and the potential reshaping of global trade dynamics. However, navigating these new risks and regulations will be crucial for sustaining growth in the coming years.
