India’s Exports to the US Decline Amid Trump’s 50% Tariffs: Impact on Goods and Smartphones
India’s exports to the United States have taken a significant hit, with a recent analysis by the Global Trade and Research Initiative (GTRI) revealing a 22.2% decline from May to August 2025. This downturn is attributed to the steep tariffs imposed by the U.S. government, which have escalated from 10% to 50% within a few months. Surprisingly, even products that are exempt from tariffs, such as smartphones, have experienced unexpected drops in export volumes. The GTRI warns that the full impact of these tariffs will be felt in the coming months, particularly affecting key sectors like textiles, gems, and chemicals.
Impact of Tariffs on Export Volumes
The GTRI’s analysis highlights a troubling trend in India’s exports to the U.S., particularly in sectors that are traditionally strong. From May to August 2025, total goods exports fell from $8.8 billion to $6.9 billion. The increase in tariffs has been a major factor in this decline, with rates rising from 10% to 50% in a matter of weeks. The GTRI’s founder, Ajay Srivastava, noted that the August data only partially reflects the tariff impact, as the full brunt of the 50% tariffs will be evident in September. This situation raises concerns about the sustainability of India’s export growth, especially in labor-intensive sectors that are sensitive to price changes.
Sector-Specific Declines
The analysis reveals that products exempt from tariffs, which accounted for 28.5% of India’s exports in August, saw a staggering 41.9% decline. Smartphone exports, a key category, plummeted by 58%, dropping from $2.29 billion in May to $964.8 million in August. Despite the U.S. being India’s largest smartphone market, the decline raises questions about production shifts back to countries like China and Vietnam. Other sectors, such as pharmaceuticals, also faced challenges, with exports decreasing by 13.3%. In contrast, the petroleum sector showed a slight increase, attributed to stable crude prices.
Labor-Intensive Exports and Their Challenges
Labor-intensive exports, which represent a significant portion of India’s exports to the U.S., have also been adversely affected. These exports fell from $4.82 billion in May to $4.30 billion in August, marking a 10.8% reduction. The jewelry sector, in particular, saw a decline of 9.1%, with diamond-studded gold jewelry experiencing a notable drop of 25.5%. Interestingly, lab-grown diamonds and jewelry have seen growth, indicating a shift in consumer preferences towards more sustainable options. Additionally, seafood exports faced a dramatic decline of 43.8%, impacting employment in coastal processing industries.
Call for Government Intervention
The GTRI’s findings have prompted industry associations to call for government intervention to address the declining export figures. They are advocating for measures such as interest equalization scheme subsidies and expedited duty remission processes. While the government has taken steps to boost domestic consumption by cutting GST rates, there is a pressing need for export-specific relief. The GTRI emphasizes the importance of protecting India’s interests in trade negotiations, particularly concerning agriculture and dairy, as U.S. demands continue to escalate. The situation remains critical, and immediate action is necessary to mitigate the adverse effects on India’s export landscape.
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