New Delhi – India’s US exports have experienced a dramatic downturn, falling 37.5% during the May-September 2025 period, according to a comprehensive analysis by the Global Trade Research Initiative (GTRI). Despite ongoing trade deal negotiations between President Donald Trump and Prime Minister Narendra Modi, the real-world impact of massive US tariffs continues to inflict significant damage on India’s export sector.
Sharp Contraction in India’s US Exports
The decline in India’s US exports represents one of the sharpest short-term collapses in recent years. In absolute terms, India’s US exports plummeted from $8.8 billion in May to $5.5 billion in September 2025, marking the fourth consecutive month of decline across multiple sectors. This dramatic reduction occurred despite the visible bonhomie between Indian and American leadership.
The GTRI analysis examined export performance between May and September to assess the immediate fallout of tariffs imposed from April 2 onwards. Initially set at 10% at the beginning of the fiscal year, the tariffs escalated dramatically in August, reaching 25% at the month’s start, followed by an additional 25% penalty imposed for India’s purchase of Russian oil despite the ongoing Ukraine conflict.
Labour-Intensive Sectors Bear the Brunt
Labour-intensive sectors, which account for nearly 60% of India’s US exports, witnessed a devastating 33% decline. These critical sectors—including textiles, gems and jewellery, chemicals, agricultural products and foods, and machinery—saw their combined export value drop from $4.8 billion in May to $3.2 billion in September.
The impact on India’s US exports has been particularly severe in sectors that employ millions of workers. The textile industry, traditionally a major employment generator, has faced mounting pressure as American importers seek alternative suppliers in countries with lower tariff burdens.
Tariff-Free Products Face Steepest Decline
Paradoxically, tariff-free products that constitute nearly one-third of India’s US exports experienced the steepest contraction. These products fell 47% from $3.4 billion in May to $1.8 billion in September. According to GTRI, smartphones and pharmaceuticals emerged as the biggest casualties in this category.
Smartphone Export Collapse
The smartphone sector’s trajectory in India’s US exports tells a particularly troubling story. After surging 197%—effectively tripling—during the April-September 2024 period, smartphone exports crashed 58% in the same period of 2025. The monthly decline was stark: from $2 billion in June to $1.52 billion in July, $964.8 million in August, and finally $884.6 million in September. GTRI noted that “the reasons for decline are not known and need examination,” highlighting the mysterious nature of this collapse.
Pharmaceutical Sector Struggles
Pharmaceutical product exports, another crucial component of India’s US exports, slipped 15.7% during the analysis period. This decline affects India’s reputation as the “pharmacy of the world” and threatens jobs in a sector known for its high-value employment opportunities.
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Sector-Specific Impact Analysis
Industrial metals and auto parts, subject to uniform tariffs across all countries, registered a relatively milder 16.7% decline in India’s US exports. However, specific commodities within this category showed varying degrees of damage: aluminium exports dropped 37%, copper fell 25%, auto parts decreased 12%, and iron and steel declined 8%.
The gems and jewellery sector experienced a catastrophic 59.5% collapse, with exports falling from $500.2 million to $202.8 million. This decline has deeply affected manufacturing units in Surat and Mumbai, while Thailand and Vietnam reportedly captured the lost US orders, further diminishing India’s US exports market share.
Solar panel exports, critical to India’s renewable energy ambitions, plunged 60.8% from $202.6 million to $79.4 million, eroding India’s competitive edge in the green energy export market. GTRI observed that with China facing only 30% tariffs and Vietnam 20% during the analysis period, India’s competitiveness in US exports has sharply deteriorated.
Structural Vulnerabilities Exposed
The GTRI analysis concluded that the decline in India’s US exports has revealed deeper issues beyond immediate tariff impacts. “Tariffs have not only squeezed India’s trade margins but also exposed structural vulnerabilities across key export industries,” the think tank stated. These vulnerabilities threaten India’s long-term competitiveness in the American market.
Urgent Interventions Required
Exporters are urging the government to respond swiftly to stabilize India’s US exports. GTRI recommends priority measures including emergency credit lines for MSME exporters, who form the backbone of many export sectors. Without urgent intervention, India risks losing market share to Vietnam, Mexico, and China, even in sectors where it previously held strong positions.
Trade Deal Negotiations Continue
India maintains it is currently in the final stages of trade deal discussions with the United States. American officials have stated that India has agreed to scale down purchases of Russian oil—an assertion that Delhi has neither confirmed nor denied. The outcome of these negotiations could significantly impact the future trajectory of India’s US exports.
The current data underscores an urgent need for strategic action to protect India’s export interests and prevent permanent market share loss in one of its most important trading partnerships.
