Indian Exports to the US Plummet 28.5% Amid Tariff Shock; GTRI Highlights Impact on Labour-Intensive Sectors
India’s exports to the United States have experienced a significant decline, plummeting by 28.5% from May to October 2025. This downturn is attributed to aggressive tariff increases imposed by the U.S., which have severely impacted key sectors of the Indian economy. According to the Global Trade Research Initiative (GTRI), exports fell from $8.83 billion to $6.31 billion during this period, coinciding with U.S. tariffs escalating from 10% in April to a staggering 50% by late August.
Impact of Tariff Hikes on Indian Exports
The GTRI report highlights that the rapid increase in tariffs has rendered Indian goods among the most heavily taxed in the U.S. market. While China faces tariffs of approximately 30% and Japan around 15%, Indian exports have been hit particularly hard. The report categorizes exports into three segments, revealing that tariff-exempt goods, including smartphones, pharmaceuticals, and petroleum products, accounted for 40.3% of October exports. However, these goods still saw a decline of 25.8%, dropping from $3.42 billion in May to $2.54 billion in October.
Uniform global tariff items, such as iron, steel, aluminum, copper, and auto parts, made up 7.6% of shipments and fell by 23.8%, decreasing from $629 million to $480 million. The most severe impact was observed in labor-intensive sectors, including gems and jewelry, solar panels, textiles, garments, chemicals, and seafood, which faced the highest tariff rate of 50%. Exports in these categories plummeted by 31.2%, erasing nearly $1.5 billion from the market.
Decline in Key Export Categories
Even tariff-free categories were not immune to the adverse effects of the tariff hikes. Smartphone exports, which represent India’s largest product line to the U.S., fell by 36%, declining from $2.29 billion in May to $1.50 billion in October. Monthly shipments saw a sharp decline over the five-month period, although there was a slight rebound in October. Pharmaceutical exports experienced a minor dip of 1.6%, while petroleum products saw a more significant decrease of 15.5%. The GTRI noted that the decline in metals and auto parts was more closely linked to weak U.S. industrial demand, as tariff treatment remained uniform for all suppliers.
Government Response and Future Initiatives
In light of these challenges, the GTRI has urged the Indian government to activate the Export Promotion Mission and advocate for the removal of an additional 25% Russia-related duty on Indian products. The Export Promotion Mission, announced in March and approved on November 12, has yet to be operationalized, existing only on paper. The think tank expressed concerns that delays in implementing schemes and disbursing funds could undermine the mission’s objectives.
With nearly eight months into the fiscal year, no schemes have been operational, and longstanding programs like the Market Access Initiative and the Interest Equalisation Scheme have not made any payments this year. The initiative, which has an outlay of Rs 25,060 crore for 2025–26 to 2030–31, aims to support micro, small, and medium enterprises (MSMEs), first-time exporters, and labor-intensive sectors. The GTRI emphasized that removing the extra tariff would significantly reduce the effective U.S. burden to 25%, providing crucial relief to Indian exporters.
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