As part of its export diversification measures in the wake of tariff shocks emanating from the US, the government is working to expand the current list of 20 “focus markets” by adding 30 more countries, officials said Monday.
The market expansion efforts that started earlier to de-risk exports will be expanded. Top 10 countries accounted for 50% of total exports when the focus country list was expanded to 20 countries. The addition of 30 countries will take the focus country initiative to cover 90% of India’s exports.
Countering US Tariffs with a Strategic Export Push
The top 10 markets for Indian exports are the US, UAE, Netherlands, China, Bangladesh, Singapore, the UK , Saudi Arabia, Germany, and Indonesia. The next 10 on the list include Australia, Brazil, Italy, Japan, Russia, South Africa, Saudi Arabia, South Korea, Turkiye, and Vietnam. The next 30 focus markets would be in under explored parts of Asia, Africa and West Asia.
Apart from market expansion, the commerce ministry is working on export diversification, import substitution, and export competitiveness. Adjustments would be made to these initiatives in light of the recent challenge to exports. “Detailed analysis is underway on these pillars. The ministry is working product by product,” the official said.
Other than focus market efforts, the focus product initiative is already under way in the government. These initiatives have been speeded up to deal with the shock that US tariffs of 50% on India land on India’s exports going ahead.
GTRI estimates that India’s exports to the US would shrink 40% this year itself from $ 86.5 billion last financial year. The sectors that are expected to take a hit are the labour intensive ones like textiles, leather and marine products.
To maintain the competitiveness in the US market, exporters also sought return of the Interest Equalisation Scheme (IES) that ended on December 31 2024. The scheme used to provide a 3% subsidy on per and post shipment credit. Other demands were extension of RoDTEP scheme (Remission of Duties and Taxes on Exported Products), RoSCTL (Rebate of State and Central Taxes and Levies) for further five years, timely payment of dues.
The Export Promotion Mission: Diversifying Markets and Domestic Consumption
The framing of the Export Promotion Mission, announced in this year’s budget, is being speeded up to create a comprehensive strategy and roadmap for export push. The allocation for the mission for this year has been kept at Rs 2250 crore of which Rs 200 crore is for Market Access Initiative (MAI) and Rs 50 crore is for lab grown diamonds.
To keep the capacities of export units occupied so that there are no job losses the other idea that is being discussed is to divert production for domestic consumption. This diversion could also substitute imports in certain categories.