India’s US Exports Plummet Amidst Tariffs, Revealing Structural Weaknesses

• India’s exports to the United States experienced a substantial downturn, falling by 37.5% between May and September 2025, according to a new analysis by the Global Trade Research Initiative (GTRI). This marks the fourth consecutive month of decline across various sectors.
• The tariffs, which started at 10% at the beginning of the fiscal year, escalated significantly in August, reaching 25% and then an additional 25% penalty for India’s purchase of Russian oil.
• The GTRI report, comparing export data from May to September, highlighted that India’s shipments to the US plummeted from $8.8 billion to $5.5 billion in this period, described as one of the sharpest short-term collapses in recent years.
• Key labor-intensive sectors like textiles, gems and jewelry, chemicals, agriculture, and machinery, which constitute about 60% of India’s exports to the US, saw a 33% decline, dropping from $4.8 billion to $3.2 billion.
• Interestingly, products previously exempt from tariffs experienced the steepest fall of 47%, from $3.4 billion to $1.8 billion, with smartphones and pharmaceuticals being the most affected. Smartphone exports, which had previously surged by 197% in the April-September 2024 period, crashed by 58% in the same period a year later.
• Pharmaceutical exports saw a 15.7% slip, while industrial metals and auto parts faced a milder 16.7% decline. Specific sectors like gems and jewelry exports plunged by 59.5%, with Thailand and Vietnam reportedly gaining market share from India. Solar panel exports also dropped by 60.8%, diminishing India’s competitive edge in renewable energy exports.
• GTRI’s analysis points out that India’s competitiveness has significantly deteriorated, especially when compared to China (30% tariffs) and Vietnam (20% tariffs) during the analyzed period.
• The report urges the government to implement swift measures, including emergency credit lines for MSME exporters, to prevent further market share erosion to competitors like Vietnam, Mexico, and China.
• GTRI concluded that the latest data clearly indicate that tariffs have not only squeezed India’s trade margins but also exposed structural weaknesses across critical export industries.
• Discussions for a trade deal between India and the US are ongoing, with the US noting India’s agreement to reduce Russian oil purchases, a point Delhi has yet to confirm or deny.

Explore More:

• India-US Trade Relations
• Impact of Tariffs on Exports
• Global Trade Research Initiative (GTRI) Analysis
• MSME Exporters and Support
• International Trade Policies