Tariff effect now showing in data: India's US exports dip sharply, analysis lists risks
Talks for a trade deal are continuing between India and the US — President Donald Trump and PM Narendra Modi's bonhomie is also regularly on display — but real-world impact of the massive US tariffs at 50% continues to show at the same time.
India's exports to the American market fell for the fourth consecutive month, across sectors, seeing a 37.5% dip in the May-September 2025 period, according to an analysis by India-based trade think tank Global Trade Research Initiative (GTRI).
After a 10% rate was imposed at the beginning of the fiscal year, the tariffs hit a high in August: recahing 25% at the beginning, and then another 25%, as “penalty” for buying Russian oil despite its war with Ukraine, by the last week of that month.
The GTRI analysis compared export performance between May and September to assess the immediate fallout of the tariffs imposed from April 2 onwards.
In absolute numbers, the plunge between May and September 2025 was from $8.8 billion to $5.5 billion. This is one of the sharpest short-term collapses in years, GTRI said in its note on Sunday, as reported by news agency ANI.
Labour-intensive sectors such as textiles, gems and jewellery, chemicals, agriculture products and foods, and machinery account for nearly 60% of India's US exports. These suffered a 33% decline, from $4.8 billion in May to $3.2 billion in September, GTRI found in its analysis.
For various reasons, tariff-free products that account for nearly one-third of India's total shipments saw the steepest contraction — falling 47 per cent from $3.4 billion in May to $1.8 billion in September, the analysis further found. "Smartphones and pharmaceuticals were the biggest casualties," it said.
How the dip played out
Smartphone exports had in fact surged 197%, meaning a tripling, in the April-September 2024 period. In the same period in 2025, this crashed 58%. It went down from $2 billion in June, to $1.52 billion in July, $964.8 million in August, and finally $884.6 million in September. "The reasons for decline are not known and need examination."
Pharmaceutical product exports slipped 15.7%.
Industrial metals and auto parts, subject to uniform tariffs for all countries, registered a milder 16.7% decline.
Aluminium exports dropped 37%, copper 25%, auto parts 12%, and iron and steel 8%.
Gems and jewellery exports collapsed 59.5%, from $500.2 million to 202.8 million, deeply affecting units in Surat and Mumbai, as Thailand and Vietnam captured lost US orders, GTRI claimed.
Exports of solar panels plunged 60.8 per cent, from USD 202.6 million to USD 79.4 million, eroding India's renewable-energy export edge.
Here, with China facing only 30% tariffs and Vietnam 20% (during the analysis period), India's competitiveness has sharply deteriorated, GTRI observed.
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