India should diversify its IT exports to mitigate risks posed by possible tariffs under US President-elect Donald Trump as a significant chunk of India’s IT export revenue comes from the United States, think tank Global Trade Research Initiative (GTRI) said on Sunday.
India’s total software services exports were $205 billion in 2023–24. According to the Reserve Bank of India’s (RBI) annual survey on computer software and information technology-enabled services (ITES) exports, the US accounts for 54 percent of these exports, followed by Europe at 31 percent.
It comes as Trump is expected to increase scrutiny of the H-1B visa program as he has taken several measures to restrict immigration even during his first term. Restrictions on immigration This was also one of Trump’s key campaign promises.
GTRI also emphasized that India needs to strengthen its data policies, resist external pressure to share internal data freely and maintain the rejection of the Indo-Pacific Economic Framework (IPEF) trade pillar for prosperity, which could constrain India’s capacity. Shape its digital and labor policies.
During Trump’s first term, disagreements over data localization were a major source of friction between India and the US. India resisted changing its stance on data localization in multilateral agreements at the WTO and tightened its rules. For example, in April 2018, the RBI mandated payment system providers such as MasterCard and Visa to store payment data of Indian residents within India.
However, India’s draft e-commerce policy, which includes strong localization provisions, has been stalled, possibly due to US pressure.
The report also mentions that Mexico, Canada and the ASEAN group benefited more from the US-China trade war than India. GTRI said India should strengthen its domestic supply chain, produce key intermediates to reduce dependence on China, and facilitate trade to improve cost efficiency and increase export competitiveness.
With Donald Trump returning as US President, GTRI said the evolving business landscape presents significant opportunities for India. Trump’s plan to impose new tariffs targeting Mexico, Canada, China and others could work to India’s advantage.
India also benefited significantly, with US imports from India increasing by $36.8 billion from $50.5 billion to $87.3 billion during this period. This makes India the sixth largest contributor to growth in US imports,” the report said.
Key drivers of India’s export growth include smartphones and telecommunications equipment, which accounted for $6.2 billion (17.2 percent of total growth), pharmaceuticals $4.5 billion (12.4 percent), petroleum oil $2.5 billion (6.8 percent), and solar cells. to $1.9 billion (5.3 percent). Gold jewelry and lab-grown diamonds together added $2.3 billion.
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