Indian Exports to the US Plunge 37.5% Amid Tariff Hikes

Indian Exports to the US have tightened profit margins across key industries, according to a new analysis by the Global Trade Research Initiative (GTRI). The report, shared by ANI, paints a troubling picture of India’s trade performance, revealing how one of the nation’s strongest export relationships has been shaken by policy turbulence in Washington.

The US—India’s largest export destination—saw shipments tumble from $8.8 billion to $5.5 billion over the five-month span, marking one of the sharpest short-term declines in recent memory. The GTRI study reviewed data between May and September 2025 to assess the fallout from escalating US tariffs that began on April 2.

Indian Exports: Tariffs Triple in Five Months, Squeezing Margins Across Sectors

The GTRI report highlights that US import duties on Indian goods started at 10%, rose to 25% by August 7, and further escalated to 50% by the end of August. The rapid tariff escalation left exporters scrambling to adjust pricing, renegotiate contracts, and absorb mounting losses.

Tariff-free products, which once made up nearly one-third of India’s total exports to the US, endured the steepest decline—a 47% plunge, from $3.4 billion in May to just $1.8 billion by September.

Smartphones and Pharmaceuticals: The Biggest Casualties

Among the hardest hit were smartphone and pharmaceutical exports, two sectors that had previously symbolized India’s rise as a global manufacturing and innovation hub.

According to GTRI, smartphone exports collapsed 58%, sliding from $2.29 billion in May to $884.6 million in September. This marks a dramatic reversal from the previous year when the same period recorded a 197% surge. “The reasons for this decline are not fully understood and require closer examination,” the report noted, hinting at possible supply chain disruptions and demand slowdown in the US tech market.

Pharmaceutical exports also slipped 15.7%, from $745.6 million to $628.3 million, as tightening margins and delayed shipments impacted profitability.

Indian Exports: Industrial Goods Hold Ground, But Momentum Slows

Industrial sectors such as metals and auto parts, which faced uniform tariffs globally, showed relatively moderate declines. The category overall dipped 16.7%, with aluminium exports down 37%, copper 25%, auto parts 12%, and iron and steel 8%.

“Because all global suppliers faced similar duties, the dip appears to be driven more by a slowdown in US industrial activity rather than any loss in Indian competitiveness,” the GTRI analysis clarified.

Labour-Intensive Sectors Face Deep Stress

Labour-heavy export categories—textiles, gems and jewellery, chemicals, agri-foods, and machinery—collectively accounting for nearly 60% of India’s US exports, saw a 33% contraction, from $4.8 billion to $3.2 billion.

The jewellery industry was particularly devastated, with gems and jewellery exports plunging 59.5%, from $500.2 million to $202.8 million. The report attributed the steep fall to competing nations like Thailand and Vietnam rapidly capturing lost market share.

Solar Exports and Renewable Edge Diminish

India’s emerging solar panel exports—once seen as a bright spot in renewable energy trade—fell 60.8%, from $202.6 million in May to $79.4 million in September. The GTRI report underscored that India’s competitiveness has weakened as China faced only 30% tariffs and Vietnam just 20%, leaving Indian exporters at a clear disadvantage.

Ripple Effect Across Key Industries

The decline was broad-based, affecting chemicals, marine and seafood, textiles, and processed food exports. Exporters are now calling for urgent policy support, including interest equalisation schemes, faster duty remission, and emergency credit lines for MSME exporters.

Without swift government intervention, the report warned, India could lose significant market share to Vietnam, Mexico, and China, especially in industries where it had previously held a strong position.

Policy Response and Future Outlook

GTRI’s findings serve as a wake-up call for policymakers and industry stakeholders. The sharp contraction in India’s exports to the US exposes both the immediate pain of tariff shocks and deeper structural vulnerabilities within India’s export ecosystem.

“Tariffs have not only squeezed India’s trade margins but also laid bare the need for diversified markets, stronger domestic value chains, and greater resilience in high-growth export industries,” the report concluded.

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