On Thursday, January 29, Finance Minister Nirmala Sitharaman presented the Economic Survey of India for the financial year 2025–26 in Parliament, officially initiating the lead-up to the Union Budget, which is set to be released on Sunday, February 1. This year’s Budget unveiling falls on a weekend.
The much-discussed India-US trade agreement was highlighted in the Economic Survey 2026, which pointed out that while progress has been made in negotiations, some tariff effects have been noted.
However, Economic Survey document said that India’s exporters are progressively shifting their focus away from the US market, as recent figures for April–November FY26 indicate a notable move towards the Middle East, Europe, Africa, and certain regions in Asia.
India’s export statistics for the period of April to November in FY26 indicate a notable transition towards alternative markets due to a decline in demand from the US in various key sectors. Although the US continues to be a significant market, exporters are progressively turning to West Asia, Europe, Africa, and certain regions of Asia to maintain overall growth.
The gems and jewellery sector experienced the most significant decline in US exports, dropping by 44.3% compared to the previous year, even as global exports saw a slight increase of 0.6%. The proportion of US imports in India’s gems and jewellery exports plummeted to 18.7% from 33.7%, while shipments to the UAE and Hong Kong rose significantly, now accounting for 53.6% of exports, according to the document.
Exports of gold jewellery to Bahrain and Saudi Arabia have risen sharply, while pearls and precious stones have seen notable increases in exports to Canada, Mexico, and China, buoyed by the India-UAE CEPA and expectations surrounding the India-UK FTA, according to the document.
In the marine products sector, exports to the US fell by 5.7%, but overall exports grew by 16.1%, fueled by high demand from Vietnam, Malaysia, China, and various European nations, including Belgium, Germany, and Poland.
The auto components industry experienced a 6.8% decline in exports to the US, while global shipments saw a 6% increase, driven by a rise in exports to the UAE, Germany, Belgium, Slovenia, Myanmar, and Brazil. The UAE’s share of auto component exports increased from 3% to 5.3%, indicating its expanding significance, according to the document.
The textiles and related products sector encountered a 6.1% decrease in exports to the US, but efforts to diversify into Africa, Europe, and West Asia helped maintain stability in global shipments.
The pharmaceuticals industry showed notable resilience, with international exports increasing by 6.5% despite uncertainties related to tariffs in the US. Gains in Africa, Latin America, and Europe contributed to offsetting fluctuations. Overall, the information highlights a strategic shift in exports, as Indian exporters lessen their reliance on the US and work towards establishing a more varied global presence,according to the document.
Why is India-US Trade deal important?
According to experts, the United States stands as India’s most essential strategic and economic ally, impacting export expansion, technology exchanges, financial inflows, and positioning within global supply chains. A significant agreement with this global leader, due to its economic size, is often referred to as the “Father of all deals.”
A deal with the US would indicate enhanced trade integration, diversification of supply chains, and long-term export predictability—key factors that Foreign Institutional Investors monitor when directing capital towards emerging markets, believes experts.
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