India's reliance on the United States as its largest export market remained largely intact in the period through July, even as tariffs on Indian goods climbed as high as 50% and New Delhi pushed to diversify its trade partners, according to an analysis of commerce ministry data carried by The Times of India.

The US accounted for about 20% of India's exports in the 12 months through July, broadly maintaining its share despite the tariff spike. The rate was later reduced to 18% in February and currently stands at 10%. The US share has actually grown from 17.4% in 2022-23, underscoring the difficulty of shifting away from the world's largest economy.

US leads, but diversification shows mixed results

US exports from India stood at $87.31 billion in 2025-26, up from $86.51 billion in the previous financial year. In the 12 months through July, India shipped goods worth $88.5 billion to the US, compared with $21.5 billion to China, according to calculations based on official data.

The UAE was the second-largest destination at $37.37 billion, followed by China at $19.48 billion. India's exports to China, however, rose sharply, increasing 42% in the 12 months through July. Other major markets included the Netherlands at $17.50 billion and the UK at $13.44 billion.

India has also widened the range of products it exports, adding around 500 product lines, mainly in electronics, engineering and marine products. The US remains particularly important for Indian exports of electronics, engineering goods, pharmaceuticals, gems and jewellery, and textiles.

Despite months of negotiations, India and the US have yet to formally conclude their broader trade agreement. Exports to several smaller markets, including Tanzania, Vietnam, South Korea, Sri Lanka and Kenya, have recorded strong growth.

Trade pacts and negotiations

India signed a trade deal with the UK, which came into effect in July; agreements with the EU, Oman, and New Zealand were concluded in 2026 but are yet to take effect. The India-UK deal provides zero-duty access for 99% of Indian exports to Britain. EU-India goods and services trade reached about €185 billion in 2025. The India-Oman CEPA, effective June 1, gives duty-free access for 99.38% of Indian exports to Oman; bilateral trade reached $11.18 billion in FY2025-26. The EU describes the India-EU agreement as the most ambitious India has concluded.

India also resumed or stepped up trade negotiations with the Gulf Cooperation Council, Canada, Israel, Peru, Chile, and the Southern African Customs Union.

Expert views on diversification

Trade analyst and former head of the Centre for WTO Studies Pritam Banerjee said free trade agreements could help India attract manufacturing away from China, but warned that the opportunity may be limited.

Ajay Sahai, director general of the Federation of Indian Export Organizations, said the industry has become extremely cautious of the fact that they have to diversify as a strategy to de-risk. He added that it could take two to three years for the impact of market diversification to become meaningful.

Commerce Secretary Rajesh Agrawal said India was focusing on economies that together account for more than two-thirds of global GDP.

Overall trade picture

India's total merchandise exports in FY2025-26 reached $441.8 billion, while combined merchandise and services exports reached $863.1 billion, with services at $421.3 billion. In April-June 2026, merchandise exports rose nearly 16% to $129.32 billion, and by July, monthly exports hit $44.24 billion.

India's exports to the US fell 16% to $26.2 billion during March-May 2026. Smartphones, pharmaceuticals, and petroleum products accounted for more than $31 billion of Indian exports to the US in FY2025-26.