Exports from India to the United States have declined significantly following the imposition of new US tariffs, according to a recent report by the Global Trade Research Initiative, which shows a 37.5% drop across key sectors. Shipments to the US dipped from about $8.8 billion to $5.5 billion between May and September 2025.
The slump follows the Trump administration's imposition of steep tariffs, starting at 10% in April, rising to 25% by August, and reaching 50% by the end of August on Indian goods. Brutal hits have been goods that carried zero import duty into the US, which fell nearly 47% during this period.
The most severe blow was dealt to smartphones, whose export to the US market decreased from $2.29 billion in May to $884.6 million in September, a decline of 58%. Pharmaceuticals slipped by 15.7%, from $745.6 million to $628.3 million.
The labor-intensive industries, which include textiles, gems and jewelry, chemicals, agri-food products, and machinery, suffered a 33% fall from $4.8 billion to $3.2 billion. Exports of gems and jewelry plummeted nearly 59.5%, with production centers in Surat and Mumbai taking the heaviest toll.
Industrial metals and auto-components declined; aluminum skidded 37%, copper 25%, auto parts 12%, and iron and steel 8%. Solar panel exports dropped by 60.8%, as US tariffs eroded India’s cost competitiveness compared to rivals such as Vietnam and China.
This is particularly significant, given that the US is India's largest merchandise export market. GTRI stated that the tariffs have not only squeezed trade margins but also highlighted structural weaknesses in India's export sectors.
There are also concerns related to margin erosion in low-value, labor-intensive industries; the possible permanent loss of market share to countries such as Vietnam and Thailand; and the disruption of employment in manufacturing hubs.
The Government of India has been preparing relief measures for exporters that face UStariffs, including credit guarantees, duty remission support, and increased finance for MSME exporters.
This steep drop in exports brings a question mark over India's growth outlook. For the country, this has put pressure on external demand, entailing complications in achieving market diversification, supporting affected sectors, and maintaining competitiveness. If left unaddressed, the slump may have longer-term implications for India's export sector.