NEW DELHI: India is making a medium- to long-term policy shift to diversify its export destinations, moving beyond heavy reliance on the US market. The government sees the strategy as essential to mitigate risks at a time when global supply chains are increasingly being “weaponised.”
“In the past, we faced challenges in imports due to over-reliance on specific markets. Now, similar issues are surfacing in exports. This is a wake-up call for industry to diversify its export basket,” a senior official said.
Lessons from China, Covid & Geopolitics
The approach mirrors earlier attempts to reduce import dependence on China after Covid-19 and the Galwan clash. While Chinese imports have risen in recent years, officials note a shift in composition, with inputs accounting for a larger share. Still, they acknowledge that switching trade patterns is complex and cannot happen overnight.
Experts argue that spreading risks is critical. Former JNU professor Biswajit Dhar said, “For a large country like India, it is never good to rely on one country. US policy has shown volatility. India should look at Africa and CIS nations, where purchasing power is improving.”
Over the past decade, China cut its export share to the US from 21% to 12%, while India’s dependence on the US has risen.
Strategy: Africa, Latin America, Europe
Think tank RIS director Sachin Chaturvedi added that India’s growing integration into global value chains—from 38% to 44% in seven years—makes diversification urgent. “We need a proper strategy for import diversification; export markets will follow. Strengthening ties with Africa and Latin America is key.”
For now, the government’s immediate focus is Europe, backed by free trade agreements with the UK and EFTA, and talks with the EU in progress. The commerce department is also drawing up a strategy targeting 50 priority countries.
Past schemes like Focus Africa and Focus LAC had sought similar diversification but were eventually sidelined in favour of easier options, such as expanding to the US market. Officials now suggest the current push may mark a more durable shift.
