If you’re an exporter in Gujarat right now, the last 14 months have been a masterclass in how fast the ground can shift.
Two separate geopolitical situations,the India-Pakistan conflict that erupted in May 2025, and a bruising tariff standoff with the United States , collided in a single fiscal year. Both are still playing out. Both are affecting shipments, insurance costs, buyer relationships, and the basic question of which markets make sense to be in.
Here’s what’s actually happening, by the numbers.
The India-Pakistan Situation: Trade Frozen, Airspace Still Closed
The Pahalgam attack on April 22, 2025, triggered a rapid chain of trade and diplomatic measures that haven’t fully unwound a year later.
India banned all direct and indirect imports from Pakistan including goods routed through third countries like Dubai or Singapore ,effective May 2. Pakistani-flagged ships were barred from Indian ports. Airspace was closed in both directions. Pakistan responded by suspending all trade with India and shutting its airspace to Indian carriers.
A ceasefire was declared on May 10, 2025. But the trade and airspace restrictions largely remained.
As of this week, Pakistan’s airspace on its eastern border has been extended through June 14, 2026. over a year after the initial closure. The practical effect: foreign carriers using the India-Pakistan corridor have had to reroute entirely, adding fuel costs and flight hours on routes connecting South Asia to Europe and Southeast Asia.
The bilateral trade numbers tell the full story. India’s exports to Pakistan in March 2026 were just $17.6 million, a 73.7% collapse compared to $67 million in March 2025. Imports from Pakistan: zero.
For most Indian exporters, the direct Pakistan trade loss is manageable. The bilateral trade relationship had already been shrinking for years. But the indirect costs, higher freight insurance, rerouted cargo flights, elevated regional uncertainty, ripple through supply chains in ways that don’t always show up clearly in a single line on a P&L.
The US Tariff War: Big Stakes, Finally Some Clarity
This one mattered much more commercially, and it went through a full arc over 14 months.
Starting April 2025, the US imposed reciprocal tariffs on Indian goods, initially at 26-27%. That escalated sharply by August 2025 when, with trade negotiations stalled and India continuing to purchase Russian crude oil, the US doubled down to a cumulative 50% tariff on most Indian exports. For context: $87 billion of India’s goods went to the US annually. At 50% tariffs, that relationship was under genuine threat.
The result showed in the data. India’s merchandise exports were essentially flat through the middle of FY2025-26, barely 0.6% growth over the April-October period despite services doing well. Categories like textiles, gems and jewellery, shrimp, and engineering goods took measurable hits.
Then in February 2026, things shifted. On February 6, India and the US announced an interim trade framework. The 50% tariff was cut to 18%, putting India below competitors like Bangladesh, Vietnam, Sri Lanka, and Indonesia in terms of US market access cost. Agriculture and dairy were protected. Zero duties for Indian spices, tea, coffee, cashew, mango. The FIEO called it a “historic milestone for Indian exporters.”
Commerce Minister Piyush Goyal framed the ambition clearly,India and the US are aiming to take bilateral trade to ₹45 lakh crore in the coming years.
So where does this leave Indian exporters today? In a better position than six months ago,but navigating a market that proved in 2025 it can move sharply and quickly.
What the 2026 Trade Picture Actually Looks Like
India’s overall merchandise exports in January and February 2026 were around $36.5–36.6 billion per month,relatively stable, with combined goods and services exports touching $80.45 billion in January 2026, a 13.17% year-on-year increase.
Services are doing the heavy lifting. Services exports for FY2025-26 are estimated at $418 billion, up nearly 8% year-on-year. The services surplus of $213 billion is substantially offsetting the merchandise trade deficit.
On the merchandise side, the bright spots in March 2026 were petroleum products (+5.88%), engineering goods (+1.13%), minerals (+11.27%), and handicrafts (+8.51%). Gems and jewellery, which took the hardest tariff hits, are still recovering.
For Gujarat specifically, where engineering goods, diamonds, ceramics, textiles, and chemicals form the backbone of export activity, the US tariff reduction is meaningful. But it doesn’t eliminate the need to diversify. A market that went from 27% to 50% to 18% duties in 14 months is a market that deserves a hedge.
What Smart Exporters Are Doing Right Now
The exporters navigating this environment well have a few things in common. They’re not waiting for stability before making decisions, they’re using the disruption to find opportunities others are missing.
Identifying alternative markets before they’re needed
When the US was at 50% tariffs, Indian exporters who had already built relationships in Europe, the Gulf, Southeast Asia, and Africa had options. Those who were 60-70% US-dependent had nowhere to pivot. Real trade data can show you which markets are growing imports of your specific product category right now, before the next shock forces the question.
Watching where competitors are moving
Shipment intelligence shows actual transaction-level data which suppliers are winning business in which markets, at what volumes and price points. When a trade lane gets disrupted, the exporters who track competitor movement in near real-time are the ones who spot opportunities first.
Getting compliance tight in a high-scrutiny environment
Geopolitical stress reliably increases customs scrutiny. The wrong HS code, a documentation error, a classification dispute, these are manageable problems in normal times. In an environment where governments are actively reviewing trade flows and enforcing rules of origin more strictly, they become expensive ones. Getting classification and documentation right is not paperwork overhead. It’s operational risk management.
How Eximium Helps
| The Challenge Right Now | What Eximium Provides |
| Over-reliance on US market after tariff volatility | Trade analytics showing growing demand across alternative markets |
| Finding verified buyers outside traditional geographies | Shipment intelligence with active importer data by country and HS code |
| Tracking competitor movement as trade lanes shift | Real-time supplier-buyer relationship data |
| HS code accuracy under tighter global scrutiny | Classification tools that reduce compliance and documentation risk |
| Documentation errors creating customs delays | Export document automation, invoices, packing lists, certificates, LC docs |
The goal isn’t to replace your judgment about which markets to enter. It’s to make sure that judgment is backed by what’s actually happening in trade right now, not assumptions built in a calmer environment.
The Bottom Line for 2026
The India-US trade deal is real progress. The Pakistan situation, while largely contained for most exporters in terms of direct bilateral trade, is a reminder of how quickly regional geopolitics can affect logistics costs and routing decisions.
The exporters who’ll grow through this environment aren’t necessarily the largest or the best-connected. They’re the ones making faster, better-informed decisions, identifying where the demand is moving, reaching verified buyers before competitors do, and keeping their operations clean enough to execute without friction.
That starts with better data.
Visit www.eximium.ai to see how Indian exporters are using trade intelligence to find their footing in what’s become one of the most complex international trade environments in recent memory.
Eximium works with manufacturers and exporters across Gujarat and India — helping them identify markets, reach verified buyers, and manage export documentation with less friction.