India’s Export Decline to the United States: A Comprehensive Analysis
India’s export trajectory to its most significant foreign market, the United States, has experienced a dramatic downturn, largely attributed to stringent tariff increases, according to a report released by the Global Trade Research Initiative (GTRI) on Saturday.
Between May and October 2025, exports plummeted by an astonishing 28.5%, dropping from USD 8.83 billion to USD 6.31 billion.
This downturn coincided with a series of escalating US tariffs that commenced at 10% on April 2, soared to 25% on August 7, and ultimately reached a staggering 50% by late August. Consequently, Indian merchandise now faces some of the highest tariffs among all US trading partners.
In stark contrast, China’s exporters only contend with approximately 30% tariffs, while Japan’s goods face merely 15% tariffs.
Tariff-exempt categories, encompassing smartphones, pharmaceuticals, and petroleum products, constituted 40.3% of exports in October. However, these too saw a significant drop of 25.8%, declining from USD 3.42 billion in May to USD 2.54 billion in October—an overall contraction of USD 881 million, as delineated by the GTRI.
Moreover, products subjected to uniform global tariffs—predominantly iron, steel, aluminum, copper, and auto parts—made up a mere 7.6% of October’s shipments.
Exports in this category dwindled by 23.8%, receding from USD 629 million in May to USD 480 million in October, representing a substantial decrease of around USD 149 million.
The most severe losses were observed in labor-intensive sectors, which faced a staggering 50% tariff. These items, accounting for 52.1% of October’s exports, plummeted by 31.2%, crashing from USD 4.78 billion to USD 3.29 billion—effectively erasing nearly USD 1.5 billion in just five months.
Ajay Srivastava, Founder of GTRI, noted, “Smartphones, India’s leading export category to the US, suffered a 36% decline, descending from USD 2.29 billion in May to USD 1.50 billion in October, resulting in a loss of almost USD 790 million.”
Monthly exports exhibited a consistent downward trend from the USD 2 billion mark in June to USD 1.52 billion in July, plummeting to a meager USD 964.8 million in August. Although there was a slight recovery to USD 1.5 billion in October, it underscores the volatility in trade.
Pharmaceutical exports also witnessed a marginal decline of 1.6%, slipping from USD 745.6 million to USD 733.6 million. Likewise, petroleum product shipments experienced a downturn of 15.5%, falling from USD 291 million in May to USD 246 million in October.
Additionally, the report highlighted that various labor-intensive sectors, including gems and jewelry, textiles, garments, chemicals, and seafood, also experienced substantial decreases in outbound shipments.
In particular, chemical exports tumbled by 38%, declining from USD 537 million to USD 333 million.
Source link: Communicationstoday.co.in.
