India's Exports to US Drop 37.5% Following Steep Tariff Hikes
India's exports to the US fell sharply by 37.5% between May and September 2025 due to escalating US tariffs, rising from 10% to 50%. Key sectors like smartphones, pharmaceuticals, gems, and solar panels suffered major declines. Labor-intensive sectors dropped 33%, while metals and auto parts declined moderately. The steep tariffs have eroded India's competitiveness, risking lost market share to countries like Vietnam and China.
Between May and September 2025, India's exports to the United States plunged from USD 8.8 billion to USD 5.5 billion, a 37.5% drop directly linked to US tariff hikes introduced from April 2 onward. The tariffs started at 10%, quickly increased to 25% by early August, and reached 50% by late August. Tariff-free product exports, making up nearly one-third of shipments, contracted by 47%. Notably, smartphone exports crashed 58%, reversing a prior surge, while pharmaceuticals dropped by 15.7%. Labor-intensive sectors including textiles, gems, chemicals, and agri-foods declined 33%. Gems and jewellery exports fell almost 60%, losing ground to competitors in Thailand and Vietnam. Solar panel exports plunged 61%, diminishing India's renewable energy export advantage amid lower tariffs for China and Vietnam. Industrial metals and auto parts saw smaller reductions, attributed partly to a slowdown in US industrial activity rather than competitiveness loss. Exporters urge urgent government measures like enhanced interest support, faster duty remission, and emergency credit to protect export sectors. Without intervention, India risks losing market share to Vietnam, Mexico, and China, with tariffs exposing structural vulnerabilities across critical industries according to GTRI analysis.
