On August 27, as President Trump’s America First tariff regime unleashed a 50% levy on Indian exports, New Delhi jolted to action. Suddenly, India the ninth-largest US trading partner faced its most severe trade jolt in decades, worse than even post-nuclear-test sanctions. Nearly 18% of exports (over $120 billion in FY24-25) are threatened including textiles, jewels, auto parts, IT hardware, shrimp, and leather.

Export hubs are already staggering: Tiruppur’s knitwear orders risk losing ₹6,000 crore, while the shrimp trade could shed ₹24,000 crore, and Surat’s diamond margins are tumbling. Industry bodies, like FIEO, are demanding emergency export credit, duty drawbacks, and liquidity cushions; government departments are racing sector-wise assessments.

Yet this shock may crystallize a long-overdue shift. Indian policymakers are exploring broader export markets Africa, Latin America, the Middle East as well as deepening ties with the EU, UK, and GCC. Simultaneously, PM Modi is gearing up for a diplomatic push in East Asia and multilateral forums. The real question: Can India reframe this setback into a strategic turning point in global trade?