India's Exports to US Plummet 37.5% Amidst Steep Tariff Hikes

Economy

2nd November 2025, 2:26 PM

India's Exports to US Plummet 37.5% Amidst Steep Tariff Hikes

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Short Description :

India's exports to the United States saw a sharp 37.5% decline from May to September 2025, falling from $8.8 billion to $5.5 billion. This collapse, driven by significant US tariff increases, severely impacted sectors like smartphones, pharmaceuticals, and gems and jewellery. The analysis by Global Trade Research Initiative (GTRI) suggests India risks losing market share to competitors like Vietnam and China.

Detailed Coverage :

India's exports to the United States experienced a drastic 37.5% contraction between May and September 2025, dropping from $8.8 billion to $5.5 billion. This severe decline is attributed to escalating US tariffs, which increased from 10% in early April to 50% by late August.

Tariff-free products faced the steepest fall, down 47%. Smartphones and pharmaceuticals were the hardest hit; smartphone exports crashed by 58%, from $2.29 billion in May to $884.6 million in September. Pharmaceutical exports decreased by 15.7%.

Other affected sectors include gems and jewellery (down 59.5%), solar panels (down 60.8%), and labour-intensive sectors like textiles and agri-foods (down 33%). Industrial metals and auto parts saw a milder 16.7% decline.

The Global Trade Research Initiative (GTRI) noted that while global suppliers faced similar duties, the dip might also be linked to a slowdown in US industrial activity. However, with China facing lower tariffs, India's competitiveness has sharply deteriorated, allowing countries like Thailand and Vietnam to capture lost orders.

Exporters are urging the government for urgent measures, including enhanced interest-equalisation support, faster duty remission, and emergency credit lines for MSME exporters, to prevent further market share loss.

Impact This news has a significant negative impact on Indian export-oriented businesses, potentially affecting India's trade balance, corporate earnings for affected companies, and overall economic growth. The loss of competitiveness in key sectors poses a long-term challenge. Rating: 7/10.

Terms Used: Tariffs: Taxes imposed by a government on imported goods or exported goods. Think Tank: An organization that researches and advocates for a particular cause or policy. MSME Exporters: Micro, Small, and Medium Enterprises involved in exporting goods. Interest-Equalisation Support: A government scheme that subsidizes the interest rate on export credit, making it cheaper for exporters to borrow money. Duty Remission: The process of refunding duties paid on imported inputs used in exported goods.