Shipments to US outpace India’s overall export growth

India's robust export performance to the United States in November, registering a 22% year-on-year increase to $6.98 billion, presents a compelling narrative of economic resilience and strategic trade dynamics. This growth significantly outpaced India's overall export growth of 19.38% for the same month and a more modest 2.62% for the April-November period. What makes this achievement particularly noteworthy is that it occurred despite the US reportedly levying a 50% tariff on certain imports from India since August. This scenario offers a rich ground for understanding India's trade prowess, bilateral relations, and global economic positioning.

To truly grasp the significance, let's delve into the background context. The India-US trade relationship has evolved significantly, especially since India's economic liberalization in 1991. The US has consistently been one of India's largest trading partners, both in goods and services. However, this relationship has not been without its challenges. In 2019, the US withdrew India's designation as a beneficiary country under the Generalized System of Preferences (GSP) programme, which had allowed duty-free entry for certain Indian products. This move resulted in higher tariffs on several Indian exports, creating a more competitive environment for Indian goods in the US market. The current report of a 50% tariff on certain imports since August suggests further specific trade barriers, although a blanket 50% tariff across all Indian imports would be highly unusual and likely lead to a substantial decline, not growth. It's more probable that this refers to specific product categories or a particularly high duty on certain items.

What happened here is a testament to the strong underlying demand for Indian products in the US market and the competitive edge of Indian exporters. Despite the tariff headwinds, Indian goods, ranging from pharmaceuticals and engineering goods to textiles and gems & jewellery, continue to find buyers. The substantial growth in exports to the US, even while overall export growth was slower, indicates a potential shift in trade patterns or increased competitiveness in specific sectors targeting the US market.

Key stakeholders in this dynamic include, first and foremost, **Indian exporters and industries**. Their ability to absorb or bypass tariffs, innovate, and maintain cost-effectiveness is crucial. The **Government of India**, particularly the Ministry of Commerce & Industry and the Directorate General of Foreign Trade (DGFT), plays a vital role in formulating trade policies, negotiating with trade partners, and providing support mechanisms to exporters. On the other side, the **US Government**, through the Office of the United States Trade Representative (USTR) and the Department of Commerce, sets trade policies and imposes tariffs. Lastly, **US consumers and importers** are critical drivers, as their demand ultimately fuels these exports.

This trend matters immensely for India for several reasons. Economically, it showcases India's **export resilience** in the face of protectionist measures. Sustained export growth, especially to a major economy like the US, is vital for India's **Balance of Payments (BoP)**, helping to manage the current account deficit and strengthen foreign exchange reserves. It also contributes to **job creation** and economic growth across various sectors. Politically and strategically, a robust trade relationship with the US reinforces the broader **India-US strategic partnership**, which is crucial for regional stability and global governance, especially in the context of Indo-Pacific strategies like the Quad. The ability to increase exports despite tariffs also hints at India's increasing integration into global supply chains as a reliable alternative, aligning with the global 'de-risking' trend away from over-reliance on single nations.

Historically, India's trade policy has evolved from an inward-looking, protectionist regime post-independence to a more open, export-oriented one, especially after the 1991 reforms. The emphasis on global trade is enshrined in the **Foreign Trade (Development and Regulation) Act, 1992**, which empowers the government to make provisions for the development and regulation of foreign trade. The subject of foreign trade falls under **Entry 41 of the Union List** in the Seventh Schedule of the Indian Constitution, granting the Parliament exclusive power to legislate on 'Trade and commerce with foreign countries; import and export across customs frontiers'. Government initiatives like 'Make in India' and 'Atmanirbhar Bharat' are designed to boost domestic manufacturing and make India a global manufacturing and export hub, directly supporting such export growth.

Looking ahead, the future implications are significant. This strong performance could provide leverage for India in ongoing **bilateral trade negotiations** with the US, potentially leading to a more comprehensive trade agreement or a rollback of certain tariffs. It also positions India as an increasingly attractive partner for global supply chain diversification. However, India must remain vigilant about potential trade disputes and continue to enhance its competitiveness through policy reforms, infrastructure development, and skill upgradation. The long-term sustainability of this growth will depend on India's ability to maintain product quality, diversify its export basket, and adapt to evolving global trade dynamics and geopolitical shifts. The government's forthcoming **Foreign Trade Policy** will be critical in providing a stable and supportive framework for exporters.