Beyond the Tariff Shock — How Indian Exporters Can Pivot from the USA to New Growth Markets like UAE or Singapore through Crossborder eCommerce channels.

Dibyendu Ganguly
Aug 11
8 min read

alternative to USA market for Indian merchants like UAE and Singapore

TL;DR: The U.S. has recently announced a sharp rise in tariffs on select Indian imports (an extra 25% bringing certain duties up to ~50%) — a policy change that can materially affect India’s B2B exports, eCommerce sellers (FBA and D2C), and dropship models. This article unpacks the numbers, shows which industries will be most exposed (including jewellery), explains the operational and pricing consequences for different fulfilment strategies (shipping from India, FBA in U.S., or keeping inventory in 3PLs), and offers practical diversification playbooks focused on UAE and Singapore. I also explain how EximScouts’ plug-and-play model reduces friction for brands pivoting fast.

Key sources: Reuters (tariff announcement, sector impact), USTR (trade totals), EY/ASSOCHAM (e-commerce exports report), GJEPC/Reuters (gems & jewellery data), Stratrich (UAE e-commerce market). Reuters+1 United States Trade RepresentativeEYstratrich.com

1) The policy shock — quick facts you must know:

On August 6, 2025, the U.S. government announced an additional 25% tariff on certain Indian imports; in practice the measure can raise duties as high as ~50% on targeted lines once phased in. This is a sudden, high-impact change for exporters. Reuters
U.S.–India trade (goods + services) was around US$212.3 billion in 2024, underlining how large and important the U.S. market is to Indian exporters. Any broad disruption here has macro and micro consequences. United States Trade Representative

(These two are the top load-bearing facts for this post — keep them front-and-center when communicating to your teams and merchants.)

2) Trade & sector context — numbers that matter:

India → USA trade snapshot

USTR: total U.S.–India goods & services trade ≈ US$212.3B (2024). While the headline includes services, merchandise trade with the U.S. is a massive chunk of India’s exports. United States Trade Representative

India e-commerce exports or Crossborder eCommerce (the micro-opportunity that’s fragile)

EY / ASSOCHAM estimate India’s e-commerce exports at US$4–5 billion (FY2023) today — a small fraction of total merchandise exports but with huge growth potential if policy, logistics and payments frictions are fixed. EY highlights an aggressive target of US$200–300 billion by 2030 if reforms succeed. (See chart: India eCommerce Exports: FY2023 vs 2030 target.) EY

Gems & Jewellery (why it matters)

India’s gems & jewellery exports are a large segment (reported around US$28.5 billion annually), and the U.S. accounts for nearly one-third of that trade — meaning jewellery makers, cutters, and exporters are immediately exposed to any new duty on Indian shipments. (Chart: Gems & Jewellery — USA share ≈ 33%.) Reuters

UAE & Singapore: alternative gateway sizing

UAE eCommerce market was around US$7.5B in 2023 and is projected to exceed US$13B by 2028 — a high-growth market that functions as a GCC hub for re-exports and regional expansion. (See UAE market trend chart.) stratrich.com

3) Which categories/industries will be most affected?

High impact (very exposed)

Garments & Apparel — India’s apparel exporters have large US buyers and operate on thin margins; an increase from 25%→50% tariff could price them out versus Vietnam/Bangladesh/Turkey. Reuters
Gems & Jewellery — With ~one-third of exports going to the U.S., this sector faces immediate order cancellations or price renegotiation. Reuters
Home textiles & furnishings — Rugs, home decor and tabletop items are price-sensitive in the U.S. retail chains.
Consumer electronics accessories (non-core semiconductors) — tariff shocks raise landed cost for low-margin accessories.
Footwear & leather goods — exposed to tariff hikes; competitors with lower duties gain advantage.

Moderate impact

Handicrafts, jewellery components — niche demand may persist, but volume could shrink.
Specialty foods (snacks, spices) — may absorb some duties via higher retail price, but larger volume players will be impacted.

Lower impact (but not immune)

IT services, software, digital exports — not physically shipped so tariffs don’t apply directly, but corporate clients and broader macro shocks can reduce demand.

(Sector exposure also depends on price elasticity, presence of distribution partners in U.S., and the seller’s ability to re-price or absorb duty.)

4) How the tariff increase affects different fulfilment strategies for eCommerce export or Crossborder eCommerce sellers?

Let’s look at three common approaches Indian eCommerce exporters use to serve the U.S. market and how a tariff doubling (25%→50% on certain lines) affects each:

A. Ship from India (direct/Cross-border, pay duty on arrival)

Pros: Low upfront inventory cost; nimble catalogue testing.
Cons: Tariff is paid on import — either by the seller (reduced margin) or the buyer (reduced conversions). Higher customer checkout “landed cost” reduces competitiveness vs local sellers.
Operational effect: Increased return rates; price sensitivity leads to lower conversion; shipping times already a disadvantage vs local stock.

B. Keep inventory in U.S. via 3PL (multi-channel; fulfil FBA + own store)

Pros: Faster delivery, Prime/FBA advantages, better conversion and buy-box presence.
Cons: Tariffs apply on import into the U.S. whether you use 3PL or FBA — landing cost per unit rises before goods reach the 3PL. Bulk shipments may mitigate some per-unit freight but not tariff.
Operational effect: If margins are thin, tariffs force price hikes or cancellation. Inventory planning becomes riskier (higher working capital). Sellers may prefer moving SKUs to duty-free or lower-tariff destinations.

C. Use Amazon FBA (send stock to Amazon USA)

Pros: Best discoverability and conversion for Amazon-centric brands; Prime shipping.
Cons: Same tariff issue — shipments to Amazon US incur tariff at customs (or Amazon may collect duties under DDP arrangements). With tariffs doubling for certain HS codes, FBA economics can break.
Operational effect: Brands might delist or reduce assortment, shift high-margin SKUs to US FBA, and pivot low-margin SKUs to other regions.

Bottom line: A higher tariff acts like a tax on inventory you try to place in the U.S. market — so the usual levers (lower freight, better listing conversion) often aren’t enough if the duty shifts economics.

(Top factual claim on tariff scale and its potential to raise landed cost — cite Reuters.) Reuters

5) eCommerce-specific scenarios: price math and examples

(These are illustrative simplified examples to show the scale of the problem — you should run SKU-level margin models for each product.)

Example — a ₹1,500 (≈US$18) handcrafted cushion exported to the U.S. (numbers rounded for simplicity):

FOB price (India) = US$18
Freight + insurance per unit = US$4
US import tariff 25% = US$4.5 (previous scenario) → landed cost pre-retail ≈ US$26.5
New tariff scenario 50% = US$9 → landed cost pre-retail ≈ US$31
If retail markup and marketplace fees are fixed, profit margin reduces drastically; conversion rate may fall as price moves up.

For gems & jewellery the math is starker because raw-material-linked duties (or tariffs plus customs valuations) amplify volatility and working capital costs. Industry reports note immediate softening of orders after tariff announcements. Reuters

6) Strategic pivots — diversify markets & fulfillment (why UAE & Singapore matter)

Given U.S. tariff uncertainty, a two-prong pivot is wise:

(A) regional diversification (UAE / GCC / MENA)

and

(B) Southeast Asia via Singapore gateway.

Why UAE?

Hub & re-exporter: UAE sits at the crossroads for GCC and MENA; inventory placed in UAE can serve local demand and be redistributed to neighbouring markets with simpler regional logistics.
Large eCommerce market & growth: UAE eCommerce ~US$7.5B in 2023, forecast to >US$13B by 2028 — high purchasing power and strong logistics. (See UAE chart.) stratrich.com
Marketplaces & channels: Amazon.ae, Noon, Carrefour UAE, Namshi, Mumzworld, and increasingly Trendyol/others — all receptive to Indian brands, many with cross-border or local warehousing options.

Why Singapore?

Gateway to Southeast Asia: Singapore’s logistics, payments, and marketplace ecosystems (Lazada, Shopee, Qoo10, etc.) make it a springboard into Indonesia, Malaysia, Vietnam, Thailand and the Philippines.
Business friendliness: Ease of doing business, robust 3PL and regional warehousing, and preferential trade links.

Strategic play: Move lower-margin/high-volume SKUs away from U.S. inventory (or delay U.S. launches), and route them via UAE or Singapore to capture growth in MENA & SEA. Use the U.S. only for higher-margin SKUs that can absorb duties or for which brand positioning justifies price increases.

7) Challenges when entering UAE / Singapore — what to watch for:

Regulatory & product compliance (labels, ingredients for cosmetics, electrical standards, halal certification for food in GCC).
Localisation — product copy, sizing, packaging, and payment preferences. Arabic language optimizations matter in GCC.
Marketplace onboarding — some marketplaces require brand registry, local tax documents, EORI/IOR partners, or a local bank account for certain payout methods.
Returns & reverse logistics — cultural and logistical expectations vary; plan local returns policies and RMA flows.
Currency & tax registrations — VAT thresholds (UAE introduced VAT, GCC rules vary); understand when registration is needed.
Competition — in some categories (electronics, fashion) incumbents dominate and use aggressive pricing.

8) How EximScouts’ plug-and-play model helps (practical & fast)

EximScouts is positioned to accelerate this pivot in three concrete ways:

A. Marketplace-ready onboarding (UAE & Singapore)

EximScouts maintains pre-built relationships and operational templates for Noon, Amazon.ae, Carrefour, Namshi, Trendyol UAE, Lazada, Shopee, etc. That shortens acceptance time and reduces friction during vetting and brand approvals. These are some of the best Crossborder eCommerce channels in the region. (Platform examples mentioned earlier.) stratrich.com EY

B. Warehousing & multi-channel fulfillment

Option to store inventory in UAE or Singapore 3PLs (or use EximScouts’ partners) and fulfil multichannel orders (marketplaces + Shopify + wholesale) — lowering delivery time and absorbing cross-border complexity.

C. Compliance & documentation handled

EximScouts supports HS code mapping, product certifications, customs filings, IOR/MOR services, VAT registration guidance and returns management — vital when you move away from a single market to many.

D. Speed to market

Because of pre-existing processes and local partners, EximScouts can often get merchants from onboarding to first sales in weeks (not months) — vital in times of policy shock.

9) Playbook: Step-by-step pivot plan for merchants

Phase 0 — Rapid assessment (week 0–1)

SKU profitability check vs new tariff scenarios. Flag SKUs with <20% cushion at higher tariffs.
Identify 20 priority SKUs to test in UAE/Singapore.

Phase 1 — Quick market entry (week 1–4)

Register on target marketplaces (Noon, Amazon.ae, Lazada, Shopee). Complete brand & documentation checks.
Ship a pilot batch to UAE / Singapore 3PL (small quantity) and enable multichannel listings.

Phase 2 — Scale & optimize (month 2–6)

Monitor sell-through, CAC, returns; adjust pricing and marketing per market.
Use local promotions & marketplace advertising (Noon ads, Lazada Sponsored Products).
Move to local FBA/Fulfilment if unit economics improve.

Phase 3 — Omnichannel expansion (month 6–12)

Add B2B channels (Tradeling, Dubuy) and local wholesale buyers in GCC/SEA.
Reevaluate US market: bring back select SKUs for FBA if tariffs change or if you can secure trade-remedies (exemptions).

10) Longer term structural responses exporters should consider.

Tariff engineering & HS code review: Reclassify products where allowed, or redesign products to fall into lower-tariff categories.
Near-shoring final assembly: Finish a value-adding step (like final assembly or packing) in a duty-friendly country (UAE free zone or third country) to change customs origin rules.
Trade diplomacy & policy advocacy: Industry bodies (GJEPC, AEPC, Apparel Export Promotion Council) should coordinate to seek tariff exemptions or mitigation measures.
Hedging FX & working capital adjustments: Tariff shocks impact rupee and cash flows — build liquidity buffers and renegotiate payment terms.

11) Conclusions & recommended next steps for Indian brands

Assume uncertainty persists. Don’t wait for the tariff “to settle.” Model SKU economics assuming the higher duty. Reuters
Prioritise market diversification. UAE & Singapore are proven gateways to GCC and SEA respectively; they're practical near-term alternatives. stratrich.com EY
Test fast, scale if profitable. Use pilot batches to measure conversion and landed cost in the region before committing larger inventory.
Use a partner like EximScouts to reduce time-to-market, handle regulatory friction, and run multi-market experiments quickly. (EximScouts’ multichannel capability shortens the learning curve and unlocks marketplaces across UAE & SEA.)

Contact EximScouts team to explore synergies and more opportunities around Singapore and UAE market entry with Speed.