Key Points:
- India US trade fell 37.5% after new US tariffs.
- Key export sectors were hit hard.
- Talks for a trade deal are ongoing.
India’s merchandise exports to the United States fell sharply in September, dropping 37.5% compared to May levels, following Washington’s decision to impose a 50% tariff on Indian goods. Data from the commerce ministry show that shipments to the US stood at USD 5.46 billion in September, an 11.93% decline year-on-year, while imports from the US increased 11.78% to USD 3.98 billion.
According to the Global Trade Research Initiative (GTRI), exports to the US were down 17.9% from USD 6.87 billion in August, marking the steepest monthly fall of 2025 and the fourth consecutive monthly decline. “September was also the first full month in which Indian goods faced Washington’s 50% tariff on most products,” GTRI Founder Ajay Srivastava said.
Sharpest monthly drop of 2025
The impact of the new duties has been significant across key sectors. Srivastava said exports to the US have been declining since June 2025, after registering a 4.8% growth in May to USD 8.8 billion. “Between May and September, India’s exports to the US have dropped by almost 37.5%, wiping out more than USD 3.3 billion in monthly shipment value,” he said.
The sectors most affected include textiles, gems and jewellery, engineering goods, and chemicals. Industry experts said these categories have historically accounted for a large share of India’s export earnings from the US, making the latest tariffs particularly disruptive.
For the April–September period of the current fiscal year, India US trade saw exports to the US grew 13.37% to USD 45.82 billion, while imports increased 9% to USD 25.6 billion. The September decline, however, signals a possible slowdown in bilateral trade momentum.
Talks underway for trade deal
Both countries are currently negotiating a bilateral trade agreement to ease tariff barriers and restore trade growth. An Indian delegation is in Washington for discussions aimed at addressing key issues, including tariff rates, market access, and regulatory standards.
Officials said the talks are expected to pave the way for a long-term framework to balance India US trade relations. However, no timeline has been announced for a potential agreement.
India’s trade with the US has remained one of its most significant economic relationships, with the US consistently ranking among its top export destinations. The recent policy shift by Washington, however, has added uncertainty for exporters dependent on the American market.
Mixed trends in other markets
While India US trade and exports to several European nations declined, India’s trade performance showed resilience in other regions. Exports to China rose 34.18% in September to USD 1.46 billion, with the April–September total up 21.96% to USD 8.41 billion. Imports from China also climbed 16.35% in September to USD 11.31 billion and 11.25% in the first half of the fiscal year to USD 62.88 billion.
Exports to the Netherlands, Singapore, and France fell during September, while shipments to the United Arab Emirates, the United Kingdom, Germany, Saudi Arabia, Australia, Bangladesh, Brazil, and Italy recorded positive growth.
On the import front, India’s inbound shipments decreased from Russia, Korea, Australia, Vietnam, Germany, and Taiwan, but increased from the UAE, Saudi Arabia, Singapore, Japan, Malaysia, the UK, and Thailand.
Trade analysts said the shifting export patterns reflect the broader impact of global tariff adjustments and changing demand trends. The coming months will be crucial for India’s exporters as they navigate new trade dynamics and await clarity on the proposed India US trade agreement.
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