Sharp Drop in India’s US Exports Driven by Escalating Tariffs
India’s exports to the US plummeted 37.5% between May and September 2025, falling from $8.8 billion to $5.5 billion, amid aggressive US tariff hikes that reached 50% on many Indian goods[1][2][5]. Sectors hit hardest included smartphones, pharmaceuticals, gems, and jewellery, with some categories seeing nearly 60% declines. Labour-intensive and renewable energy exports also dropped sharply, eroding India’s competitiveness versus rivals like Vietnam, Thailand, and China[2]. Exporters are calling for urgent government support to prevent further market loss.
India’s exports to the United States suffered a dramatic 37.5% decline from May to September 2025, shrinking from $8.8 billion to $5.5 billion, according to a Global Trade Research Initiative (GTRI) report released November 2, 2025[1][2][5]. The precipitous drop is directly tied to a series of escalating US tariffs that began at 10% in April, rose to 25% in early August, and peaked at 50% by late August on several key Indian products[2]. Smartphones and pharmaceuticals—previously tariff-free and accounting for nearly a third of India’s US shipments—were the worst affected, with smartphone exports collapsing 58% and pharmaceuticals down 15.7%[2]. Gems and jewellery exports fell 59.5%, dealing a heavy blow to major manufacturing centers. Industrial metals and auto parts, facing uniform global tariffs, saw a more modest 16.7% drop, suggesting the decline reflects broader US industrial slowdown rather than a loss of Indian competitiveness alone[1]. Labour-intensive sectors like textiles, gems, chemicals, agri-foods, and machinery—which make up nearly 60% of India’s US exports—collectively declined 33%[1]. Solar panel exports plunged 60.8%, as India lost ground to China and Vietnam, which face lower tariffs[2]. The report warns that without prompt policy intervention—such as financial support, faster duty remission, and emergency credit—India risks losing further market share to Vietnam, Mexico, and China, even in sectors where it once held an advantage[2]. The data underscores how punitive tariffs have not only squeezed trade margins but also exposed structural vulnerabilities across India’s key export industries.
