India’s exports to the United States have witnessed a sharp and sustained fall, plunging 37.5 per cent between May and September 2025, following steep tariff hikes imposed by Washington, news agency ANI reported on November 2 citing data from the Global Trade Research Initiative (GTRI).
This marks one of the sharpest short-term declines in India’s export performance in recent years.
The US, India’s largest export destination, imposed tariffs starting at 10 per cent in April, which escalated to 25 per cent by early August and then to 50 per cent by the end of the month. The effects were immediate and severe. In just five months, India’s exports to the US fell from USD 8.8 billion to USD 5.5 billion.
The brunt of the decline was borne by tariff-free goods, which previously accounted for nearly one-third of India’s exports to the US. These shipments collapsed 47 per cent—from USD 3.4 billion in May to USD 1.8 billion in September—highlighting how even previously exempted categories could not escape the broader disruption.
Smartphones and pharmaceuticals emerged as the biggest casualties. India’s smartphone exports, which had earlier surged 197 per cent year-on-year between April–September 2024 and 2025, dropped dramatically by 58 per cent in just a few months.
Shipments fell from USD 2.29 billion in May to USD 884.6 million in September, recording monthly declines through the period. The reasons for this sharp reversal, GTRI noted, remain unclear and require closer examination.
Pharmaceutical exports also shrank by 15.7 per cent, from USD 745.6 million to USD 628.3 million. While the sector remains less volatile than electronics, the decline underscores the spillover impact of trade barriers on essential goods.
Industrial metals and auto parts -- where tariffs applied uniformly to all supplier countries -- fared marginally better but still recorded a 16.7 per cent dip. Within this group, aluminium exports were down 37 per cent, copper 25 per cent, auto components 12 per cent, and iron and steel 8 per cent. GTRI attributed this decline less to competitiveness and more to a broader slowdown in US industrial demand.
Labour-intensive sectors, which collectively contribute nearly 60 per cent of India’s exports to the US, faced a severe 33 per cent contraction -- from USD 4.8 billion in May to USD 3.2 billion in September. Textiles, gems and jewellery, chemicals, agri-foods, and machinery bore the brunt of the slump.
The gems and jewellery sector, long a mainstay of India’s export economy, saw one of its worst months in years. Exports collapsed by nearly 60 per cent -- from USD 500.2 million to USD 202.8 million -- hitting manufacturing hubs in Surat and Mumbai. GTRI noted that Thailand and Vietnam swiftly captured a portion of India’s lost market share.
The renewable energy sector also took a hit. Exports of solar panels fell 60.8 per cent, from USD 202.6 million in May to USD 79.4 million in September. India’s competitive position weakened sharply as rivals faced significantly lower US tariffs -- China at 30 per cent and Vietnam at 20 per cent.
Other categories such as chemicals, marine products, textiles, and processed foods also posted steep declines. Exporters across these industries have begun pressing the government for immediate relief measures. Their demands include enhanced interest equalisation to reduce financing costs, quicker duty remission to ease cash-flow pressures, and emergency credit lines for MSME exporters.
GTRI’s analysis warns that without swift policy action, India risks ceding long-term ground to Vietnam, Mexico, and China, even in sectors where it traditionally held a strong foothold. The think tank’s concluding note was stark: the tariffs have not only squeezed profit margins but also exposed deep-seated structural vulnerabilities within India’s export framew
Source Name : Economic Times