Domestic Market Diversification Challenges for Exporters in India

• Factors such as low surplus absorption capacity and different specifications hinder a shift to the domestic market for exporters struggling to sell in the U.S. due to 50% tariffs.

• Trade experts and exporters believe international market diversification is a more feasible option, but it cannot happen overnight and requires active government support.

• Market stress and the rationalisation of GST rates could expand the domestic market for some sectors, but not others like diamonds and jewellery.

• Diversifying to domestic markets can only be a long-term solution, as the set-up is different for exports and domestic (demand) due to different markets and overheads.

• Exporters need to continue supplying to their foreign markets to retain major brands that source supplies from them.

• The domestic market cannot substitute the export market for India, as it is a hugely import-dependent country.

• The best way to deal with the loss of the U.S. market would be to diversify to newer markets in Africa, Latin America, and Central Asia, with the Centre providing all support.

India Export Challenges 2025 is important topic for Civil service exam (WBCS).

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