India's Strategic Export Shift Amid US Tariff Pressure
New Delhi has initiated crucial consultations with potential buyers from Ghana, Rwanda, Uganda, Togo, Bahrain, Bhutan, Nepal and Sri Lanka as part of an emergency plan to counter the devastating impact of 50% US tariffs on Indian small and medium businesses. According to three senior officials familiar with the developments, this strategic move aims to protect the 45% of India's exports that come from the MSME sector.
Government-Led Export Diversification Initiative
The ministries of micro, small and medium enterprises (MSME) and commerce are spearheading this ambitious pilot project in collaboration with Indian embassies across these target countries. The initiative focuses on redirecting goods originally destined for the United States toward emerging markets in Africa and neighboring South Asian nations.
Currently, India exports products worth approximately $18 billion annually to these eight countries. Detailed export figures reveal that in FY25, India's exports to these markets reached $18.4 billion, representing about 4.2% of total goods exports. The broader context shows India's total exports to African countries stood at $35.75 billion in FY25, while exports to South Asian nations reached $27.19 billion during the same period.
Reverse Buyer-Seller Meets Show Early Success
The government has already conducted two reverse buyer-seller meets in Pune and Vizag during the first two weeks of November as part of the Raising and Accelerating MSME Performance (RAMP) programme. These unique events brought potential international buyers to India rather than sending sellers abroad.
Vinod Kumar, president of India SME Forum, revealed that MSMEs from Maharashtra secured export business for sampling worth $1.47 million (approximately ₹13 crore) from several countries at the Pune meet. He emphasized that if these sample purchases clear quality checks, they could generate $116.77 million in exports for Indian small businesses.
Beyond direct exports, the meetings attracted significant investment interest, with entrepreneurs from New Zealand expressing willingness to invest $12.25 million through trade joint ventures and foreign direct investments.
Sector-Wide Market Diversification Strategy
The export redirection strategy encompasses multiple key sectors where Indian MSMEs have strong capabilities:
- Textiles and Apparel: Companies like Karnataka-based Gokaldas Exports Ltd are leveraging African operations to benefit from favorable tariff regimes and potential AGOA reinstatement
- Pharmaceuticals: New destinations include Montenegro, South Sudan, Chad, Comoros, Brunei, Latvia, Ireland, Sweden, Haiti, and Ethiopia
- Electronics: Focus markets include São Tomé, Montenegro, Cayman Islands, Vietnam, and Sweden
- Agricultural Products: Targeting Nigeria, Switzerland, Lithuania, Mexico, Canada, Argentina, and Brazil
Long-Term Export Resilience Vision
A senior commerce ministry official described this initiative as part of a broader export resilience strategy that addresses immediate trade shocks while building lasting access to new markets. The government plans approximately six additional buyer-seller meetings between February and October next year.
Sivaramakrishnan Ganapathi, vice chairman and managing director of Gokaldas Exports, highlighted the strategic importance of their Africa operations, noting that several African nations enjoy more favorable market access to the US. This positioning helps capture orders that might otherwise lose price competitiveness when shipped directly from India.
The comprehensive approach involves coordination between Indian missions abroad, export promotion councils, and local chambers of commerce to facilitate logistics, certification, and market penetration in target countries. This multi-pronged strategy represents India's determined response to evolving global trade dynamics while safeguarding its crucial MSME sector.
