India Eyes New Markets in Singapore, UAE After 50% Tariff Blow; Marine Exports, Textiles Among Key Markets

After the heavy blow of 50% tariffs from Trump administration, India’s commerce ministry has taken a step towards softening it by redirecting exports to countries like Singapore and United Arab Emirates (UAE), according to two government officials involved in the process. Industry experts said that the US tariff setback comes as an enabler for India to achieve its long-desired diversification of the trade basket.

Speaking to Mint on the condition of anonymity, the officials stated that early signs of success on India's push are already visible, as Singapore has agreed to increase purchases of Indian farm goods and is likely to open its market to seafood, offering relief to marine exporters. On the other hand, UAE is being lined up as an alternative hub for textiles, which is one of the worst-hit sectors.

In FY2025, India had shipped $2.68 billion worth of marine products to the US, up from $2.50 billion in the previous year. However, exporters now face a major disruption due to the tariff barrier and the resulting supply chain disruption.

India exported textiles worth $2.1 billion to the UAE in FY25, 6.2% higher that the previous year's $1.95 billion. For perspective, India’s textile exports to the US were at $10.9 billion in FY25, up from around $10.02 billion in FY24. 

The ministry's plan involves creating new demand avenues in these markets to absorb part of the diverted trade from the US and provide exporters with immediate relief.

One of the officials quoted above said, “As part of the new playbook, a series of visits are planned to these trusted trade partners by senior officials and industry representatives.” He further said, “Singapore has already shown interest in importing Indian eggs and poultry, and discussions are underway to permit the entry of Indian fish. A team is expected to visit Singapore shortly to pitch both new and traditional products."

Currently, the outreach is being viewed as a calibrated response to mitigate losses, even as negotiations between India and Washington continues under the Bilateral Trade Agreement framework.

As per trade experts, even though Singapore, the UAE, and other smaller economies cannot match the scale of US consumer demand, a partial absorption of diverted exports could offer exporters breathing space. They further pointed out that the crisis also provides an opportunity to accelerate diversification and reduce India’s reliance on one dominant market.

In a conversation with Mint, Ajay Sahai, director general, Federation of Indian Export Organizations (FIEO) said, “If we get a market anywhere that will provide relief. We have to see to what extent other markets will be able to absorb, because the kind of consumerism seen in the USA is difficult to find in other countries, particularly in small economies.”

“But then, if we are talking about a hit of a few billion dollars in exports, and even if some significant portion can be absorbed by the smaller markets, it will be a huge relief. We have to keep in mind that the setback is temporary, but it should be used for diversification," he added.

Sahai further questioned, “If there is a tariff today, what happens if the USA goes into recession tomorrow?” “We must have alternative markets in place. From that perspective, these initiatives are extremely good, and I am quite sure that the way the government is moving on FTAs (free trade agreements) will itself provide comfort and advantage to Indian exporters in diversifying into those markets," Sahai noted.

According to the second official quoted above, “On one hand we are looking at trading arrangements through formal agreements and on the other side, we are seeking complementarities with other countries.”

In UAE and other countries, negotiations are being held across a range of sectors, including pharmaceuticals, gems and jewellery, textiles, marine and agricultural products to reduce India’s dependence on its traditional markets and diversify trade channels. “A lot of work is going on in identifying new markets and products for diversion of exports," the official added.

A meeting of the India–UAE High-Level Joint Task Force on Investments (HLJTFI) is expected to be held on the third week of September. Currently, India and the UAE are targeting $100 billion in trade by 2030, excluding oil and precious metals.

Talks are currently underway with Germany to expand the trade basket, with India exploring what products it can export and in return import from Germany. These efforts are focus on diversifying India’s merchandise trade.

Bilateral trade between India and the UAE surged to $99.7 billion in FY25—$36.3 billion in exports and $63.4 billion in imports—from $83.6 billion in the year before and $84.8 billion in FY23, commerce ministry data shows. Currently, India’s UAE  export portfolio includes refined petroleum products, chemicals, and gems and jewellery. The other exports are pharmaceuticals, textiles, garments, and agricultural products such as rice, pulses, and spices. Imports are dominated by crude oil and petroleum products, along with liquefied natural gas (LNG).

In case of Singapore, India’s trade sheet includes $12.98 billion in exports and $21.29 billion in imports in FY25, taking total trade to $34.27 billion and leaving the country with a trade deficit of $8.32 billion. In FY24, exports were $14.41 billion and imports $21.20 billion, taking bilateral trade to $35.61 billion and a trade deficit of $6.79 billion.

Among the major exported items to Singapore, were petroleum products, engineering goods, organic and inorganic chemicals, gems and jewellery, electronic goods, drugs and pharmaceuticals, rice, plastics, spices, and ready-made garments.

According to a senior industry representative, "Opening up markets in Singapore and the UAE will give exporters an immediate alternative to redirect shipments that are now stuck because of the US tariffs. Even if these destinations cannot fully replace the scale of American demand, they will help sustain cash flows, keep production lines active, and prevent deeper job losses.”

"Our immediate priority is to make sure exporters don’t lose ground because of the US tariffs. That is why we are intensifying outreach with partners like the UAE and Singapore, where complementarities already exist. The idea is to convert certificates and agreements into real trade flows," a senior commerce ministry official stated.