As India’s exports to the US decline, finding alternatives will take time. Exports of garments, shoes, and bags depend on large global retailers that require years of proven compliance, quality, and reliability before shifting orders.

Many emerging markets in Latin America and Africa lack the scale or organized retail systems to absorb large volumes. Slowing global trade and the EU’s tough environmental laws from January 2026 will further raise barriers. Discounted Chinese products pose another challenge. Unlike commodities, these exports rely on trust and relationships, making quick diversification difficult.

Diversifying exports to new markets will not happen overnight. However, cutting costs through revived schemes and promoting Indian products in other markets could help exporters gradually expand beyond the US.

According to GTRI, export promotion funding has steadily declined, weakening support for small and mid-sized exporters. The earlier MEIS scheme had an outlay of Rs 45,000 crore and supported 40,000 exporters.

It was abolished in 2020 and replaced by RoDTEP and RoSCTL with about Rs 20,000 crore allocation. “The bulk of funds were shifted to the PLI scheme, which has benefitted fewer than 100 firms, with limited disbursements. To restore balance, India must allocate higher amounts annually to broad-based export schemes, ensuring widespread support for MSMEs, while continuing PLI for large-scale sectors,” said GTRI.

Meanwhile, India’s overseas trade missions remain underfunded, with a budget of just ₹250 crore, and are mostly staffed by generalist diplomats with limited trade expertise. In contrast, countries like the US and China deploy large cadres of professional trade officers to aggressively promote their industries abroad, it said.

India needs to revamp this system by deploying trade professionals with sectoral knowledge and substantially raising the budget. This can generate buyer links, market intelligence, and support exporters in tackling non-tariff barriers.