Editor’s Note
The Economic Survey 2026 highlights a significant strategic pivot for India’s export economy. Faced with substantial losses from recent U.S. tariff policies, particularly in the gems and jewelry sector, India is accelerating its shift toward diversifying trade partners. This move underscores a broader global trend of nations reassessing and realigning their economic dependencies in response to geopolitical trade pressures.
The Economic Survey 2026 has revealed that the tariff policies of former US President Donald Trump delivered a major blow to India’s exports, with the gems and jewelry sector being the most affected. The report indicates that India is now rapidly reducing its dependence on the US and moving towards new markets such as Africa, Latin America, and Asia.
According to the Economic Survey, a significant shift in India’s export patterns was observed during April to November 2025-26. While the US remains an important market for India, recent data suggests that Indian exporters are gradually reducing their dependence on the US and are rapidly turning towards West Asia, Europe, Africa, and parts of Asia. The survey states that due to declining demand in the US and tariff-related uncertainties, exporters in several sectors have begun seeking alternative markets to maintain overall export growth.
According to the Economic Survey, the gems and jewelry sector suffered the biggest blow in the US. Exports to the US fell by 44.3% year-on-year, while the sector’s total global exports increased marginally by 0.6%. The US share dropped from 33.7% to 18.7%. Meanwhile, the share of the UAE and Hong Kong increased to 53.6%. The document states that exports of gold jewelry to Bahrain and Saudi Arabia have grown rapidly. Exports of pearls and precious stones have increased to Canada, Mexico, and China. This is largely attributed to expectations linked to the India-UAE CEPA agreement and the proposed India-UK FTA.
In the marine products sector, exports to the US also fell by 5.7%, but total global exports increased by 16.1%. This growth is primarily attributed to contributions from countries like Vietnam, Malaysia, China, Belgium, Germany, and Poland. This indicates that Asia and Europe are compensating for the decline in the US.
In the auto components industry, exports to the US fell by 6.8%, while global exports increased by 6%. According to the survey, exports to the UAE, Germany, Belgium, Slovenia, Myanmar, and Brazil have increased. Notably, the UAE’s share has risen from 3% to 5.3%, indicating that Gulf countries are becoming new major markets for India’s auto components.
In the case of textiles and related products, exports to the US fell by 6.1%. However, growing exports to Africa, Europe, and West Asia have kept total global shipments stable. The survey states that this strategic market diversification is helping India’s textile industry mitigate tariff risks.
The pharmaceutical sector has shown the most resilience. Despite tariff uncertainties in the US, India’s pharma exports registered a 6.5% growth. This is largely attributed to a surge in demand for medicines in Africa, Latin America, and Europe. According to the survey, the global demand for India’s generic drugs remains stable, and dependence on the US is gradually decreasing.
The conclusion of the Economic Survey 2026 is that Indian exports are now undergoing a strategic shift. Instead of relying on a single large market like the US, exporters are moving towards a multi-country strategy, diverse geographical markets, and new free trade agreements. The survey clearly states that this shift can help India withstand global trade shocks, stabilize exports, and integrate into new supply chains.