India’s export performance to the United States has seen a sharp downturn, with data indicating a 37.5% decline in exports during the May-September 2025 period. This trend, analyzed by the Global Trade Research Initiative (GTRI), follows the implementation of substantial US tariffs. The tariffs, which began at 10% at the start of the fiscal year, escalated significantly in August, reaching up to 50% as a penalty for India’s continued oil purchases from Russia.
The GTRI analysis, covering the period from May to September 2025, highlights the immediate impact of these tariffs on India’s trade. In absolute terms, exports plummeted from $8.8 billion to $5.5 billion, representing one of the sharpest short-term collapses in recent years.
Key sectors that are labor-intensive and constitute nearly 60% of India’s US exports, including textiles, gems and jewelry, chemicals, agricultural products, and machinery, experienced a collective decline of 33%, falling from $4.8 billion in May to $3.2 billion in September.
Surprisingly, products that were previously tariff-free also saw a steep contraction of 47%, dropping from $3.4 billion to $1.8 billion. Smartphones and pharmaceuticals were particularly hard-hit in this category, according to the GTRI report.
**Sector-Specific Impacts:**
* **Smartphones:** After a remarkable 197% surge in exports during April-September 2024, smartphone exports crashed by 58% in the same period of 2025, declining from $2 billion in June to $884.6 million in September. The reasons for this sharp decline require further investigation.
* **Pharmaceuticals:** Exports in this sector saw a dip of 15.7%.
* **Industrial Metals and Auto Parts:** These sectors, which face uniform tariffs for all countries, registered a milder decline of 16.7%. Specific drops included aluminium (37%), copper (25%), auto parts (12%), and iron and steel (8%).
* **Gems and Jewellery:** This sector experienced a dramatic 59.5% collapse, with exports falling from $500.2 million to $202.8 million. The report claims that Thailand and Vietnam have capitalized on these losses, capturing orders previously held by Indian exporters, impacting businesses in Surat and Mumbai.
* **Solar Panels:** Exports of solar panels plunged by 60.8%, from $202.6 million to $79.4 million, diminishing India’s competitive edge in renewable energy exports. This is attributed to India facing higher tariffs (e.g., 50%) compared to China (30%) and Vietnam (20%) during the analyzed period.
**Recommendations and Risks:**
The GTRI urges the government to respond swiftly, proposing emergency credit lines for MSME exporters as a priority measure. Without immediate intervention, India risks losing market share to countries like Vietnam, Mexico, and China, even in areas where it previously held a strong competitive position.
“The latest data make one point clear: tariffs have not only squeezed India’s trade margins but also exposed structural vulnerabilities across key export industries,” GTRI concluded. India is currently in the final stages of trade deal discussions with the US, with the US noting India’s agreement to reduce Russian oil purchases, a point that Delhi has neither confirmed nor denied.