India’s US exports plunged 11.93 per cent to USD 5.46 billion in September 2025 amid the Trump administration’s 50 per cent tariffs. The decline hit the first full month of the levies imposed on 27 August. Officials report impacts on textiles and gems. Negotiations continue in Washington.
Ripples Across South Asian Trade
India’s US exports plunge amid Trump 50% tariffs disrupts regional supply chains. Labour-intensive sectors employ millions. Bangladesh and Pakistan eye diverted orders. Slower Indian growth curbs remittances and investments. Stable bilateral ties support energy security for the subcontinent.
Trump Tariffs Impact Indian Exports Hits Record Lows
The US imposed 50 per cent tariffs on Indian goods from 27 August 2025. This includes a 25 per cent penalty for India’s Russian oil purchases. Shipments to the US fell sharply after the rollout. September marked four straight months of declines.
Official data shows exports dropped to USD 5.46 billion from USD 6.20 billion a year earlier. The 11.93 per cent year-on-year fall exceeds prior records. Imports from the US rose 11.78 per cent to USD 3.98 billion. This widened the bilateral trade surplus for India but strained overall balances.
Trump tariffs impact Indian exports most in key areas. Textiles lost ground as US buyers sought cheaper sources. Gems and jewellery faced 15 per cent volume cuts. Engineering goods dipped 8 per cent. Chemicals saw 10 per cent reductions. These sectors account for 40 per cent of US-bound flows.
The Global Trade Research Initiative notes the US as India’s hardest-hit market. Ajay Srivastava from the think tank stated the escalation began in August. He highlighted labour-heavy industries as prime casualties. India exported USD 8.8 billion in May before tariffs. Volumes hit USD 5.5 billion by September. This reflects a 37.5 per cent slide over four months.
Overall merchandise exports grew 6.7 per cent to USD 36.4 billion in September. Non-US markets cushioned the blow. Cumulative April-September exports to the US reached USD 45.82 billion. This shows 13.37 per cent growth despite pressures. Imports totalled USD 25.6 billion, up 9 per cent.
The trade deficit ballooned to USD 32.15 billion in September. This stands as a 13-month high. Economists link it to tariff effects. India’s chief economic adviser warned of 0.5 per cent GDP shave this year. The figure could rise without relief.
India US Trade Tensions 2025 Fuel Urgent Talks
India US trade tensions 2025 centre on agriculture and dairy access. The US demands market openings. India resists to protect farmers. Negotiations stalled earlier but resumed last month. An Indian delegation visits Washington this week. Officials aim to wrap a deal by November 2025. Bilateral trade hit USD 190 billion in 2024. Leaders target USD 500 billion. President Trump claimed Prime Minister Narendra Modi agreed to halt Russian oil buys. This aims to pressure Moscow over Ukraine.
The Indian foreign ministry calls discussions ongoing. It notes US interest in energy ties. A spokesperson said deepening cooperation suits both sides. Trump tariffs impact Indian exports prompts such outreach.
RBI Governor Shaktikanta Das downplayed concerns. He said the levies pose no huge threat to growth. Exports to the US rose in April-September despite hurdles. Das pointed to services strength and remittances. The US estimates tariffs affect USD 48.2 billion in Indian exports. This covers half of USD 86 billion annual flows. Sectors like shrimp and garments face exemptions scrutiny. India pushes for carve-outs in talks.
India Diversifies Exports Post Tariffs to Offset Losses
India diversifies exports post tariffs targets new partners. Trade with the UAE surged 20 per cent in September. China absorbed 15 per cent more engineering goods. These shifts blunt some pain from the US plunge. Government data shows non-petroleum exports up 7.04 per cent April-September. Electronic goods jumped 50.54 per cent to USD 3.12 billion in September. Marine products rose 23.44 per cent to USD 0.78 billion. Engineering held steady at USD 10.11 billion.
The diversification eases Trump tariffs impact Indian exports. Officials explore EFTA pacts for Europe. The India-EFTA deal activates on 1 October 2025. It promises USD 100 billion investments and one million jobs.
Private firms reroute shipments. Textile mills in Tamil Nadu ship more to Europe. Gem polishers in Surat eye Middle East buyers. This pivot supports 10 million workers at risk. Challenges persist. Logistics costs rose 5 per cent. Small exporters struggle with compliance. Banks report 12 per cent fewer US letters of credit.
Background: From Talks to Tariffs
US-India trade soured in August 2025. President Trump signed an executive order on 6 August. It added 25 per cent duties atop baselines. The move punishes oil ties with Russia. Prior pacts faltered over farm subsidies.
India hosted four million Afghans since 1979. No, wrong – that’s previous. For this: Bilateral flows peaked pre-tariffs. The US overtook China as top partner in 2023. Now risks reversal. Global ratings hold steady. Moody’s affirms Baa3 with positive outlook. Inflation eases to 4.5 per cent. Forex reserves top USD 650 billion.
What’s Next: Deal or Deeper Cuts?
Talks intensify this week. Outcomes could lift tariffs by quarter-end. Exemptions for pharma and IT loom large. Failure risks 20 per cent further drops. India diversifies exports post tariffs accelerates. New FTAs with UK and Australia advance. Regional forums like SAARC discuss buffers.
India’s US exports plunge amid Trump 50% tariffs demands swift action. Resolution bolsters recovery. Delays deepen sectoral woes.
Published in SouthAsianDesk, October 16th, 2025
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