India’s exports to the United States have continued their downward slide for the fourth straight month, plunging 37.5% between May and September 2025, as steep US tariff hikes hit multiple sectors, according to an analysis by the Global Trade Research Initiative (GTRI).
Exports to India’s largest trading partner fell from USD 8.8 billion to USD 5.5 billion during the period — one of the sharpest short-term declines in recent years. The GTRI report attributed the fall to the series of tariff increases imposed by the US beginning April 2, 2025, when duties started at 10%, rose to 25% in early August, and reached as high as 50% by late August for Indian goods.
Tariff-free goods and key sectors see steepest declines
Products that were previously tariff-free — accounting for nearly one-third of India’s total exports to the US — suffered the biggest contraction, dropping 47%, from USD 3.4 billion in May to USD 1.8 billion in September.
Among specific sectors, smartphones and pharmaceuticals were the hardest hit. Smartphone exports, which had grown by nearly 197% year-on-year between April-September 2024 and 2025, plummeted 58% from USD 2.29 billion in May to USD 884.6 million in September. Shipments consistently fell month-on-month — from USD 2.0 billion in June to USD 964.8 million in August, before dipping below USD 900 million in September.
Pharmaceutical exports also declined by 15.7%, slipping from USD 745.6 million to USD 628.3 million, while industrial metals and auto components, which face uniform tariffs across countries, witnessed a 16.7% drop, from USD 0.6 billion to USD 0.5 billion. Within this category, aluminium exports fell 37%, copper 25%, auto parts 12%, and iron and steel 8%.
Labour-intensive exports also under pressure
Labour-heavy sectors such as textiles, gems and jewellery, agri-products, machinery, and chemicals — which collectively account for about 60% of India’s exports to the US — recorded a 33% decline, from USD 4.8 billion in May to USD 3.2 billion in September.
The gems and jewellery industry was among the worst affected, with exports collapsing 59.5% to USD 202.8 million, as competitors like Thailand and Vietnam captured India’s lost orders. Similarly, solar panel exports plunged 60.8% to USD 79.4 million, eroding India’s position in renewable energy exports.
GTRI noted that India’s competitiveness has weakened compared to rivals, with China facing only 30% tariffs and Vietnam 20%, making their exports more attractive to US importers.
Exporters urge government intervention
Exporters are now urging the government to take urgent remedial measures to cushion the impact of these tariffs. Industry demands include:
- Enhanced interest equalisation support to reduce financing costs.
- Faster duty remission to ease liquidity pressures.
- Emergency credit lines for MSME exporters.
According to GTRI, failure to act swiftly could result in permanent loss of market share to competitors like Vietnam, Mexico, and China, even in sectors where India previously held a strong footing.
“The latest trade data makes one thing clear — US tariffs have not only squeezed India’s margins but also exposed deep-seated structural vulnerabilities across major export industries,” the report concluded.
