India Mitigates US Tariff Impact Through Export Strategy
India successfully mitigated the ramifications of the US tariff imposition in late 2025 by significantly enhancing its export volume of non-tariffed products, notably propelled by smartphone sales.
This surge occurred even as shipments of 184 products subjected to tariffs plummeted by a staggering 96 percent.
However, replicating this strategic response may present challenges as recent US legislation grants the administration, under President Donald Trump, the power to enforce a 100 percent import tariff on purchasers of Russian energy, implicating India directly.
An analysis conducted by Moneycontrol reveals that exports of 154 commodities exhibiting growth skyrocketed by 150 percent, reaching $8.5 billion from September to December 2025 compared to the same period in the previous year.
This substantial increase unfolded during the critical four months following the US’s sharp escalation of tariffs on Indian imports.
In detail, Washington instituted a 25 percent reciprocal tariff in addition to an extra 25 percent levy tied to India’s acquisition of Russian oil, effective from August 27, 2025, compounding the financial strain on various sectors.
Fortunately, several significant categories, including mobile devices and pharmaceuticals, remained exempt from these new tariffs, a policy decision that proved vital for maintaining export momentum.
Among these, smartphones emerged as the cornerstone of resilience, with exports soaring by 166 percent to $5.8 billion during the latter part of 2025, a dramatic leap from $2.2 billion the previous year.
Notably, phones represented approximately 68 percent of the aggregate value of the 154 rapidly evolving commodity lines and about 72 percent of the $5 billion in additional exports generated.
The Expansion Extended Beyond Smartphones
Further analysis highlights that exports of therapeutic and prophylactic human-derived substances surged from roughly $20 million to nearly $159 million, whereas exports of optical fibres and bundles escalated from $25.6 million to almost $103 million.
Non-alloyed aluminium ingot exports demonstrated noteworthy growth as well, climbing from $5.6 million to $44.3 million.
It is critical to note that, unlike smartphones, aluminium exports faced Section 232 tariffs uniformly applied to all suppliers, thereby not imposing the same disadvantage for India.
Moreover, various other commodities, including automatic regulating and controlling instruments, pharmaceutical formulations, electrical conductors, and aluminium products, also recorded substantial increases.
Conversely, the overall picture reveals notable distress for products directly impacted by the heightened US duties, with exports across the 184 tariff-affected commodities diminishing by 96 percent during the analyzed timeframe.
This resilience of India’s export sector emerged not merely from the ability of exporters to absorb increased duties but stemmed largely from the composition of its export portfolio.
Products thriving outside the coercive tariff structures, especially in electronics and pharmaceuticals, provided essential buffer mechanisms against the steep declines seen in other areas.
Impending Risk: Russian Oil Tariffs
This phenomenon takes on heightened importance with the introduction of a novel, potentially more severe source of tariff instability.
President Trump has enacted legislation permitting the imposition of tariffs up to 100 percent on goods imported from major consumers of Russian oil and gas.
Nevertheless, the legislation bestows discretion for implementation and does not enforce a mandatory 100 percent duty on India.
Given that Russia ascended to being India’s largest supplier of crude in 2025, constituting approximately one-third of its oil imports, this new tariff legislation poses a considerable threat.
This reliance intensified after the disruption of traditional supply routes due to regional conflicts, with Indian refiners substantially increasing their purchases from Russia.
By mid-2026, Russian oil had captured over 50 percent of India’s import share, augmenting its criticality as a primary energy source.
However, the US’s newfound statutory authority to levy significantly heavier tariffs on major importers of Russian energy may place India’s export cushion under considerable strain in the near future.
Source link: Moneycontrol.com.
