Shipping containers stacked on the KMTC Jebel Ali container ship at Jawaharlal Nehru Port in Navi Mumbai, Maharashtra, India, on August 9, 2025. Photo: VCG

Shipping containers stacked on the KMTC Jebel Ali container ship at Jawaharlal Nehru Port in Navi Mumbai, Maharashtra, India, on August 9, 2025. Photo: VCG

In an interview with Indian news agency ANI published on Sunday, US economist Jeffrey Sachs pitched for India joining the Regional Comprehensive Economic Partnership (RCEP), saying that India should be part of the RCEP, which including China, Japan, South Korea, ASEAN, Australia and New Zealand, and “that would be a very dynamic way to grow for years to come.”

In the interview, Sachs argued that India could target a 7-percent GDP growth in the coming decade by focusing on East Asia. “India needs a strategy that does not depend on export growth to the US market,” the US economist said, according to ANI.  

This suggestion was based on the pressing reality of India’s trade landscape, where India’s heavy reliance on the US market for exports has increasingly become a vulnerability in light of rising tariffs. In this context, exploring a strategic pivot toward Asian markets could not only help mitigate these risks but also provide India with greater maneuverability and opportunities for diversification.

In recent years, India has witnessed a surge in its exports to the US, which is India’s top export market, making up 18 percent of exports and 2.2 percent of GDP, according to BBC. However, the US’ imposition of a 50 percent tariff on Indian goods has dramatically heightened the uncertainty surrounding Indian exports. Under such circumstances, seeking alternative markets has become an imperative. Meanwhile, the Asian market, with its vast untapped potential, offers the promise of a more stable growth path for India.

The economic and trade potential of Asian markets goes without saying, and joining the RCEP is undoubtedly a crucial step if India is to make a real difference in its trade with Asia. The RCEP, with its vast regional population, substantial GDP and significant volume of goods trade, each accounting for approximately 30 percent of the global share, encompasses 15 economies, including China. 

Its effect is expected to grow incrementally for the next 10 to 15 years, by which point 90 percent of the goods within the agreement will achieve zero tariffs, according to China’s State Council Information Office. 

Given the market potential and trade prospects, this region could provide India with a much-needed buffer against US trade volatility.

Yet, it is not merely a matter of signing an agreement. The real challenge lies in India’s ability to smoothly adjust its production and export structures to align with Asian demand. There are significant differences between the goods India exports to the US and those it sells in Asian markets. The US has a strong demand for India’s information technology services, pharmaceuticals, and textiles, while Asian countries engage more frequently in trade in electronics, automotive components, and agricultural products. 

This implies that India needs to restructure its industrial sector, increasing investment in the research and development (R&D) of products tailored to Asian market needs. Such an adjustment involves not only enhancing production capacity but also restructuring supply chains, optimizing trade policies, and improving companies’ ability to adapt to new markets.

China’s experience in adjusting its foreign trade can offer valuable insights for India. In the face of a complex and ever-changing international economic and trade environment, China has optimized its export structure, adjusting its export commodities based on the characteristics of different markets. 

Take Yiwu, a major hub for small commodities in East China’s Zhejiang Province, as an example: Yiwu merchants closely monitor global market trends and promptly adjust product designs and production based on the consumption habits of different countries and regions; When demand from the US market declined, they swiftly shifted their focus to Southeast Asian and European markets, developing products that met local needs and achieving market diversification. 

This ability to flexibly adjust production in response to market changes is attributed to well-established industrial and supply chains, as well as the high market sensitivity and innovation capabilities of its companies.

For India, to realize a trade pivot to Asia, it needs to first conduct in-depth research on market demand and consumption preferences across Asian nations, increasing investment in R&D and production of relevant products. Also, it needs to strengthen industrial cooperation and exchanges with Asian countries, enhancing its industrial competitiveness. 

A trade shift to Asia may face some challenges. Nevertheless, in the long run, this shift ultimately offers a crucial pathway to achieving sustainable trade growth and aligning with the eastward shift of global economic gravity. China, facing similar pressures, secured its global trade position through proactive industrial adjustment and dedicated market diversification. India, with its vast market potential, holds similar opportunities for growth.