India Exports 8-29-25

AI Overview

In 2025, India's main export partners are the United States, China, and the United Arab Emirates, according to recent trade data. 

However, the outlook is subject to change due to new tariffs imposed by the U.S. and India's efforts to diversify its trade relationships. 

Top export partners for 2025

Recent trade figures show India's leading export destinations: 

·       United States: Continues to be India's largest export market, particularly for pharmaceuticals, textiles, and gems.

·       United Arab Emirates: A major partner for petroleum products, precious stones, and jewelry.

·       China: A significant export market for products like iron ore, organic chemicals, and cotton.

·       Bangladesh: A key partner, importing goods such as cotton, machinery, and vehicles.

·       Singapore: A destination for Indian mineral fuels, chemicals, and machinery.

·       Other key partners: Include the United Kingdom, the Netherlands, Germany, and Australia. 

Impact of new U.S. tariffs

India's export outlook for 2025 is being significantly reshaped by new tariffs on its goods to the U.S.. 

·       Trade shock: In August 2025, the U.S. imposed a 50% tariff on a wide range of Indian goods, threatening major disruptions to sectors like textiles, gems and jewelry, and leather.

·       Affected sectors: Labor-intensive industries that rely heavily on the U.S. market are expected to be hit the hardest.

·       Exemptions and negotiations: Some goods, such as pharmaceuticals and computer chips, are exempt from the new tariffs, and trade negotiations are ongoing. 

Diversification through new trade agreements

To offset potential losses from U.S. tariffs and expand its global presence, India is actively pursuing new trade agreements. 

·       UK and EAEU: India has signed or is finalizing free trade agreements (FTAs) with the UK and the Eurasian Economic Union (EAEU) to create new export opportunities.

·       EFTA: A trade and economic partnership agreement (TEPA) with the European Free Trade Association (EFTA) was also finalized, securing substantial investment commitments.

·       Strategic shift: These agreements mark a strategic move toward market diversification and strengthening India's resilience against geopolitical trade risks. 

Role of AI and technology exports

While not as prominent in overall export value, Artificial Intelligence (AI) and technology play a growing role in India's export strategy. 

·       India AI Mission: India has launched initiatives like the India AI Mission to bolster its domestic AI ecosystem.

·       Skill development: The country is developing a large pool of AI developers to enhance its tech preparedness and specialization.

·       Export controls: U.S. export controls on AI and advanced technology are a complicating factor for India's tech sector, requiring strategic adjustments and bilateral agreements. 

For Artificial Intelligence (AI) exports in 2025, India's key partners are advanced tech economies and European countries. In general merchandise exports, India's traditional partners like the United States and UAE remain prominent, though new tariffs from the U.S. pose a significant challenge. 

AI and tech export partners in 2025

While data on specific AI export partners for 2025 is limited, ongoing partnerships suggest the following key markets for Indian AI talent and solutions:

·       European Union (EU): Following a joint statement in February 2025, the EU's AI Office and the India AI Mission agreed to deepen cooperation on developing trustworthy AI and collaborating on large language models.

·       United Kingdom (UK): A free trade agreement (FTA) signed in July 2025 is expected to foster collaboration in emerging technologies, including AI, as part of a cooperative framework.

·       Germany: The CEO of the Boston Consulting Group cited Germany as a nation facing AI talent shortages that India could help address. Germany is also a historically strong partner for India in technology and engineering.

·       United States (US): The US is a major importer of Indian IT services. The US International Trade Administration has identified opportunities for partnerships in AI-driven agritech and fintech.

·       Singapore: As a financial and trading hub, Singapore facilitates Indian AI investments and exports.

·       Japan and South Korea: Older FTAs with these countries have included provisions for services like telecommunications and technology. 

Major merchandise export partners in 2025

India's overall export landscape in 2025 faces shifts due to global trade tensions, though established partners remain important.

·       United States: India's largest export partner, despite new challenges. As of July 2025, Indian exports to the US were up 19.94% year-over-year, driven by sectors like electronics, pharmaceuticals, and textiles. However, new 50% tariffs introduced in late August are expected to significantly reduce exports in some sectors.

·       United Arab Emirates (UAE): A key hub for Indian goods, including petroleum products and gems. In April and May 2025, the UAE was among the top destinations for Indian exports, though export values to the UAE declined in June compared to the previous year.

·       Netherlands: A major export destination for Indian goods, including refined petroleum, chemicals, and seafood.

·       China: A growing export destination for India, with exports up 27.39% year-over-year in July 2025, though imports from China still vastly outpace exports.

·       United Kingdom: India's trade agreement signed in 2025 is designed to boost exports, particularly in pharmaceuticals and textiles.

·       Australia: Experienced significant growth as a positive export destination for India in the April–May 2025 period. 

Key trends in 2025

·       Diversification of partners: India is actively pursuing new FTAs with partners like the UK, EU, and EFTA to reduce dependence on markets like the US.

·       Focus on services exports: The government is focusing on leveraging India's strengths in service exports, particularly within the digital economy, which is estimated to reach $1 trillion by 2025.

·       Expansion of electronics and tech exports: Electronics and telecom instruments are key export commodities showing strong growth in 2025, highlighting India's expanding role in tech manufacturing.

·       AI talent exports: Industry reports indicate that India is positioned to become a strategic exporter of AI talent to countries like Germany, the UK, and the US, where demand is high.

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Comments

The US is On-Shoring Electronics and Pharmaceuticals and this will reduce India’s Exports to the US. Europe may increase it use of India’s IT Talent.  India needs to stop buying Russian Oil to end the 25% US Tariff.

Norb Leahy, Dunwoody GA Tea Party Leader