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US Tariffs Bite: India’s Exports to America Plunge 37.5% Despite Ongoing Trade Talks

  • By Thetripurapost Desk, New Delhi
  • Nov 02, 2025
  • 581

Even as India and the United States continue high-level discussions for a trade agreement, India’s exports to the American market have suffered a sharp 37.5% fall between May and September 2025, according to a study by the Global Trade Research Initiative (GTRI).

The decline coincides with the impact of steep US tariffs—now touching 50%—imposed earlier this year, dealing a severe blow to several of India’s key export sectors.

Tariffs Double Amid Political Warmth

Despite the visible camaraderie between President Donald Trump and Prime Minister Narendra Modi, the real-world effects of escalating US tariffs are evident.
Initially set at 10% in April, the tariff rate climbed to 25% in early August and then doubled again later that month as a “penalty” for India’s continued purchases of Russian oil amid the ongoing Ukraine conflict.

Exports See Sharpest Collapse in Years

In absolute terms, exports dropped from $8.8 billion in May to $5.5 billion in September, marking one of the steepest short-term declines in years, GTRI noted in a report shared with ANI.

Labour-intensive industries—including textiles, gems and jewellery, chemicals, agricultural goods, and machinery—were among the hardest hit, collectively falling 33%, from $4.8 billion to $3.2 billion over the same period.

Products previously enjoying tariff-free access, which make up nearly one-third of total exports, also saw a staggering 47% decline—with smartphones and pharmaceuticals emerging as the biggest casualties.

Sector-by-Sector Breakdown

 Smartphones: After surging 197% in April–September 2024, smartphone exports crashed 58% this year—from $2 billion in June to just $884.6 million in September.

 Pharmaceuticals: Down 15.7%, despite being a strong export segment.

 Industrial Metals & Auto Parts: Declined 16.7%, with aluminium (-37%), copper (-25%), auto parts (-12%), and iron & steel (-8%).

Gems & Jewellery: Plunged 59.5%, from $500.2 million to $202.8 million, as Thailand and Vietnam captured lost orders.

 Solar Panels: Down 60.8%, eroding India’s renewable-energy export edge.


GTRI pointed out that while India faced 50% tariffs, China was charged 30% and Vietnam 20% during the same period, significantly denting India’s competitiveness.

‘Urgent Intervention Needed’

“Exporters are urging the government to respond swiftly,” GTRI said, recommending emergency credit lines for MSME exporters and structural support for affected sectors.
Without quick action, the report warned, India risks losing long-held market positions to Vietnam, Mexico, and China.

“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,” the GTRI report concluded.

 

Meanwhile, New Delhi has confirmed that it is in the final phase of negotiations for a trade deal, while Washington claims India has agreed to scale down purchases of Russian oil—a statement Indian officials have neither confirmed nor denied.