Archive · 4 Sep 2026
Lower tariffs may revive India's missing middle exports
India’s currency has become weaker, which can sometimes make its exports cheaper for foreign buyers.
However, India’s exports have not increased enough to reduce its trade gap.
A report says the main problem is a “missing middle” of products such as textiles, footwear and plastics.
These goods are not responding strongly to the weaker rupee.
High-tech products like machinery and electronics are doing better.
High import duties can make it harder for Indian factories to produce parts and materials.
The report says new trade agreements and lower tariffs could help.
This could make Indian exports more competitive and strengthen the country’s trade balance.
HSBC Global Investment Research says India’s weaker rupee has not produced a strong export recovery.
Mid-technology exports such as textiles, footwear and plastics have responded only negligibly to currency depreciation.
High-technology exports, including machinery and electronics, have shown a more positive response.
Higher export and import duties may be discouraging intermediate-goods manufacturing and creating an inverted duty structure.
The report says trade deals and lower tariffs could improve India’s export competitiveness and reduce trade-balance vulnerability.
- Who
- India and HSBC Global Investment Research.
- What
- A report says lower tariffs and trade deals could help revive India’s weak mid-technology and intermediate-goods exports.
- When
- The report was cited on Friday; it also discusses the rupee’s decline over the last 18 months.
- Where
- India and its international export markets.
- Why
- Mid-technology exports have responded weakly to currency depreciation, while high tariffs and import duties may be discouraging manufacturing and exports.
- Researcher
- HSBC Global Investment Research
- Affected exports
- Mid-technology and intermediate goods
- Examples of weaker-performing exports
- Textiles, footwear and plastics
- Stronger-performing exports
- Machinery and electronics
- Currency movement
- The rupee weakened sharply over the last 18 months
- Proposed measures
- Execute trade deals quickly and reduce import and export tariffs
- Trade vulnerability
- A persistent trade deficit can become risky when foreign inflows are insufficient to fund it