India's exports to the United States have fallen sharply, plunging 37.5 percent between May and September 2025. This significant decline saw the total value of goods shipped to the US drop from $8.8 billion to $5.5 billion over five months. The Global Trade Research Initiative (GTRI), an India-based trade think tank, released this data, highlighting one of the steepest short-term collapses in India's export performance in recent years.^{[1][2][3][4][5][6][7][8][9]} ### Tariffs Escalate, Exports Plummet The sharp downturn follows a series of steep tariff hikes imposed by the US, starting in April 2025. Initially, duties were set at 10 percent, then escalated to 25 percent by early August, and reached a high of 50 percent by late August for Indian products.^{[1][2][3][4][10][5][6][7][9]} These tariffs were imposed by the Trump administration.^{[3][10][11][5][8][12]} The US government cited India's continued purchase of Russian oil and its participation in the BRICS bloc as reasons for these increased duties.^{[10][11][5][8][12][13]} This move has put a significant strain on the trade relationship between the two countries. ### Key Sectors Take Major Hits The impact was widespread across many Indian industries. Even products that were previously tariff-free, which make up about one-third of India's total exports to the US, experienced a severe contraction. Shipments in this category fell by 47 percent, from $3.4 billion in May to $1.8 billion in September.^{[1][2][3][4][5][6][7][8][9]} Smartphones and pharmaceuticals emerged as the biggest casualties of the new tariff regime.^{[1][2][3][4][5][6][7][8][9]} India's smartphone exports, which had surged by 197 percent year-on-year between April-September 2024 and 2025, plummeted dramatically by 58 percent in just a few months. Shipments fell from $2.29 billion in May to $884.6 million in September.^{[1][2][3][4][6][7][8][9]} GTRI noted that the exact reasons for this sharp reversal remain unclear and require closer examination.^[1][4][6][8] Pharmaceutical exports also saw a significant drop, shrinking by 15.7 percent. This meant a decline from $745.6 million to $628.3 million during the same period.^{[1][3][4][6][7][9]} While the pharmaceutical sector is generally considered less volatile than electronics, the decline highlights the broad impact of the trade barriers on essential goods.^[1][3] ### Labor-Intensive Industries Suffer Labor-intensive sectors, which together contribute nearly 60 percent of India's exports to the US, also faced severe challenges. These sectors include textiles, gems and jewelry, chemicals, agri-foods, and machinery.^{[1][3][4][5][6][9]} Collectively, these exports contracted by 33 percent, falling from $4.8 billion in May to $3.2 billion in September.^{[1][3][4][5][6][9]} Within this group, gems and jewelry exports collapsed by a staggering 59.5 percent, dropping from $500.2 million to $202.8 million.^{[2][3][4][6][9]} This hit manufacturing units in cities like Surat and Mumbai particularly hard, as other countries like Thailand and Vietnam reportedly captured lost US orders.^[2][3][4] Another significant decline was observed in solar panel exports, which plunged 60.8 percent from $202.6 million in May to $79.4 million in September.^{[2][3][4][6][9]} GTRI pointed out that India's competitive position in this sector has sharply deteriorated. This is because rivals like China face only 30 percent tariffs and Vietnam faces 20 percent tariffs on similar products in the US market.^[2][3][4][6] Industrial metals and auto parts, which faced uniform tariffs globally, recorded a milder 16.7 percent dip.^{[1][3][4][6][7][9]} This category includes aluminum exports, down 37 percent, copper down 25 percent, auto components down 12 percent, and iron and steel down 8 percent.^{[1][3][4][6][7]} GTRI suggested this decline might be linked more to a broader slowdown in US industrial demand than a loss of Indian competitiveness.^[3][4][6][9] ### Widening Trade Deficit and Future Risks The overall trade deficit for India also widened significantly, reaching a 13-month high of $32.15 billion in September. This was primarily due to the impact of US tariffs, alongside a fall in petroleum exports and a surge in gold and silver imports.^[14] The GTRI analysis warns that without swift policy action, India risks losing long-term market share to competitors such as Vietnam, Mexico, and China, even in sectors where it traditionally held a strong position.^[1][3] The think tank concluded that the tariffs have not only squeezed India's trade margins but also exposed deep-seated structural vulnerabilities within the country's export framework.^[1][3][8] ### India's Response and Exporter Demands The Indian Ministry of External Affairs has criticized the US tariffs as "unjustified and unreasonable."^[11][13] The ministry stated that India's imports of Russian oil were a necessary measure to ensure affordable energy for its 1.4 billion citizens amid global supply disruptions.^[11][13] Indian exporters are now urging the government for immediate relief measures. Their demands include enhanced interest equalization to reduce financing costs, quicker duty remission to ease cash-flow pressures, and emergency credit lines for Micro, Small, and Medium Enterprises (MSME) exporters.^[1][3][15] India's Commerce and Industry Minister Piyush Goyal recently indicated that the government is close to finalizing a bilateral trade deal with the US.^[15] Discussions are reportedly underway with the Reserve Bank of India, the finance ministry, and banks to address liquidity and loan repayment problems, particularly for hard-hit sectors like textiles.^[15] Despite the immediate challenges, India is also focusing on diversifying its export markets. This strategy is showing some positive results, with exports to countries like Spain, the UAE, China, and Bangladesh registering gains.^[16] This diversification aims to limit the impact of tariffs and build long-term trade resilience.^[1][16] India's trade resilience will depend on how quickly it adapts to shifting global trade realities and recalibrates its strategy to protect its most competitive sectors.^[1]