India’s exports to the United States are facing a significant downturn, primarily due to the high tariffs implemented by the Donald Trump administration. A recent analysis by the Global Trade Research Initiative (GTRI) highlights how these duties are eroding the competitive edge of Indian products in the American market. Specifically, August 2025 witnessed a sharp plunge in shipments to the U.S., dropping to $6.7 billion – a substantial 16.3% decrease from July – as U.S. tariffs on certain goods escalated to an alarming 50% by the month’s end. This represents the steepest monthly fall recorded in 2025.
This isn’t just a recent phenomenon; the decline has been steadily worsening. In July, exports saw a 3.6% dip compared to June, which itself experienced a 5.7% fall from May. The last glimmer of growth was in May 2025, when shipments to the U.S. briefly rose by 4.8% from April, reaching $8.8 billion after an April figure of $8.4 billion.
Ajay Srivastava, founder of GTRI, emphasized that this downward trend in exports directly corresponds with the escalating tariff regime. Initially, Indian goods enjoyed standard Most Favoured Nation (MFN) rates until April 4th. However, Washington’s introduction of a universal 10% tariff on April 5th initially had little impact, as importers rushed to purchase goods before further increases. This “front-loading” explains the temporary export rise in May. By June, the sustained 10% duty, coupled with growing speculation about additional country-specific measures, began to significantly undermine India’s price competitiveness. This shift led to orders moving to alternative suppliers, causing exports to drop by nearly 6%, a decline that continued into July under the same tariff structure.
The most severe impact, however, struck in August. Tariffs first jumped to 25% on August 7th and then dramatically doubled to 50% for most products by August 27th. This rapid escalation left Indian exporters with virtually no time to adapt, leading to the sharpest month-on-month contraction observed. Experts anticipate an even steeper decline in September, as it will be the first full month under the heavy 50% tariff rate.
It’s important to note that about one-third of India’s exports to the U.S., including crucial items like pharmaceuticals and smartphones, are currently tariff-exempt. This means the actual impact on tariff-exposed goods is far more profound than the overall figures suggest. Labour-intensive sectors, such as apparel, gems and jewellery, leather, shrimp, and carpets, are under immense pressure, as the U.S. accounts for 30-60% or even more of their total global exports. GTRI estimates that if these 50% tariffs persist through the end of fiscal year 2026, India could face a staggering loss of $30-35 billion in U.S. exports. This would be a significant blow, given that the U.S. constitutes nearly 20% of India’s total goods exports. Srivastava urged the government to implement urgent support measures for exporters, warning that without prompt relief, this prolonged tariff barrier could lead to widespread job losses and a weakened overall trade performance for India heading into 2026.