India holding consultations with potential buyers from Ghana, Rwanda, Uganda, Nepal as part of Plan B
To counter the shock of US tariffs, the ministries are collaborating with embassies to open up new markets for MSME goods.
New Delhi: India has started consultations with potential buyers from Ghana, Rwanda, Uganda, Togo, Bahrain, Bhutan, Nepal and Sri Lanka as part of a plan to work around the 50% US tariff that severely impacts its small and medium businesses, which account for 45% of exports, according to three officials in the know of the developments.
The ministries of micro, small and medium enterprises (MSME) and commerce have been leading these consultations along with the Indian embassies in these countries.
Currently, India exports products worth about $18 billion annually to the eight countries. In FY25, India's exports to these countries stood at $18.4 billion, about 4.2% of total goods exports in the last fiscal. India’s total exports to African countries in FY24 was $38.17 billion, and in FY25 it was $35.75 billion.
Total export to South Asian countries was $26.80 billion in FY24 and $27.19 billion in FY25. India’s total goods exports in FY24 was $433.09 billion, and in FY25, it was $433.56 billion.
The two ministries have jointly launched a pilot project to diversify export destinations toward friendly and emerging markets, including stakeholder consultations and buyer-seller meets, where potential buyers from these markets are present. The initiative aims to redirect goods initially meant for the US to select African nations and neighbouring countries such as Nepal, Sri Lanka, and Bhutan.
Going forward, the government plans to hold more meetings and engagements between Indian businesses and potential buying nations.
Search for markets
According to people familiar with the development, the pilot project has already begun in key African markets, including Ghana and Togo, which are being identified as potential hubs for rechanneling Indian exports, particularly in sectors like textiles, pharmaceuticals, engineering goods, and processed foods. The idea is to create alternative demand avenues for exporters who have seen their orders delayed or cancelled due to the new US tariff regime that came into effect on 27 August.
The ministries are coordinating with Indian missions abroad, export promotion councils, and local chambers of commerce to facilitate logistics, certification, and market push in the countries. One of the three persons mentioned above, a senior commerce ministry official, said that the project will help Indian exporters adapt to changing trade dynamics and ensure continuity of shipments that would otherwise face high tariff barriers.
“This is part of a broader export resilience strategy, where we are not only mitigating immediate trade shocks from the US but also creating lasting access to new markets in Africa and South Asia," the second of the three persons mentioned above said.
Earlier, Mint reported on 8 August that India was preparing to counter stiff US tariffs by pivoting to new markets in Africa and Latin America. The US has been India's largest trading partner, with goods exports to the US reaching $86.5 billion in FY25.
Currently, key export destinations for Indian engineering goods include US, UAE, Saudi Arabia, Germany, and Italy. The Netherlands, South Korea, Belgium, Mexico, Japan, and Kuwait are also considered promising markets for which stakeholder consultations may be undertaken next.
For pharmaceuticals, new destinations identified include Montenegro, South Sudan, Chad, Comoros, Brunei, Latvia, Ireland, Sweden, Haiti, and Ethiopia, while Greece is listed as a promising market. Traditional export markets for Indian drugs include the US, UK, Netherlands, South Africa, and Brazil.
In electronics, the government has listed São Tomé, Montenegro, Cayman Islands, St. Vincent, Mongolia, El Salvador, Turkmenistan, Honduras, Bahrain, Somalia, Puerto Rico, Vietnam, and Sweden as new export destinations. Russia, Mexico, and Turkey are marked as promising markets.
For agricultural and processed food products, the focus will be on Nigeria, Switzerland, Lithuania, Slovenia, Mexico, Sweden, Portugal, Cameroon, Djibouti, Latvia, Egypt, Senegal, Canada, Argentina, and Brazil. (Table)
Looking ahead
Two such buyer-seller meets have taken place so far in Pune and Vizag, as part of the Raising and Accelerating MSME Performance (RAMP) programme of the MSME ministry, in the first two weeks of November.
Queries sent to the union ministries of commerce and industry, MSME and external affairs remained unanswered till press time.
"A total of MoUs where MSMEs from Maharashtra have won export business for sampling worth $1.47 million (about ₹13 crore) from several countries at the meet held in Pune. The buyers were largely from non-traditional procuring countries. A similar buyer interest was witnessed in the Vizag meet," Vinod Kumar, president, India SME Forum, while adding that sample purchases, if cleared, would be able to generate $116.77 million of exports for Indian small businesses.
Apart from direct export orders, entrepreneurs from New Zealand expressed interest in investing $12.25 million in the form of trade joint ventures and foreign direct investments (FDI), he said.
The third of the three officials mentioned above stated that approximately six similar buyer-seller meetings are scheduled from February to October next year. "These meets are unique in the sense that usually sellers go to the countries with prospective buyers or importers. But these are reverse buyer-seller meets (RBSM), wherein potential buyers are brought in to India to meet suppliers," the official said.
Strategic move
Karnataka-based apparel exporter Gokaldas Exports Ltd is among the players looking at Africa as a growth area at a time when the steep US tariff is hitting manufacturing. With several African nations enjoying more favourable market access to the US, the company is positioning its Africa operations to capture orders that might otherwise lose price competitiveness when shipped from India.
In its Q2 results presentation, Sivaramakrishnan Ganapathi, vice chairman and managing director of Gokaldas Exports, said: “In the quarters ahead, we have strong order book visibility for both our India and Africa businesses, supported by the possibility of AGOA (African Growth and Opportunity Act, a US legislation) being reinstated. However, on the margins front, we expect the US reciprocal tariff on India to significantly affect the second half of this financial year, as the tariff burden is being shared with customers."
"That said, any positive development on the US-India trade deal would ease this impact. Our Africa business is benefiting from a favourable tariff regime, and we plan to navigate these challenges through sharper cost optimization and improved productivity across the group," he said.
- India is implementing a plan to counter the 50% US tariff, actively shifting its MSME export focus away from the US towards emerging markets in Africa and South Asia.
- The initial phase involves buyer-seller consultations with eight non-traditional procuring countries, including Ghana, Togo, and Nepal, aiming to redirect goods initially intended for the US.
- Early reverse buyer-seller meets in Pune and Vizag resulted in initial sample orders worth $1.47 million, with a potential for full orders generating $116.77 million in exports for small businesses.
- The government views this not just as an immediate mitigation effort but as a ‘broader export resilience strategy’ to establish lasting access to new, diversified markets globally across sectors like textiles, pharma, and engineering.
- Large exporters like Gokaldas Exports are aligning with this strategy by leveraging their African operations to benefit from favourable US market access.
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