India’s exports to the United States plunged by 37.5% between May and September 2025 as steep tariff hikes imposed by the Trump administration severely eroded profit margins across key industries, according to a report by the Global Trade Research Initiative (GTRI).
The report revealed that India’s shipments to its largest export market dropped from $8.8 billion in May to $5.5 billion in September, representing one of the sharpest short-term declines in recent years. The study examined trade performance over the five-month period following the introduction of new US tariffs, which began on April 2, 2025.
According to GTRI, the US duties started at 10% in April, rose to 25% by early August, and peaked at 50% by the end of August, affecting a wide range of Indian exports. Goods that were previously tariff-free—nearly one-third of India’s total exports to the US—were hit hardest, slumping 47% from $3.4 billion to $1.8 billion during the same period.
The biggest setbacks came from India’s smartphone and pharmaceutical industries. Smartphone exports, which had soared 197% in the corresponding period last year, collapsed 58% from $2.29 billion in May to $884.6 million in September, with shipments falling steadily each month. “The reasons for the sharp decline remain unclear and warrant further investigation,” the report noted.
Pharmaceutical exports shrank 15.7%, from $745.6 million to $628.3 million, while industrial metals and auto components—subject to uniform global tariffs—fell 16.7% overall. Within that group, aluminium exports tumbled 37%, copper 25%, auto parts 12%, and iron and steel 8%. GTRI observed that since all major suppliers faced similar duties, the dip likely reflects a slowdown in US industrial activity rather than a loss of Indian competitiveness.
Labour-intensive industries—such as textiles, gems and jewellery, chemicals, agri-foods, and machinery—which together account for nearly 60% of India’s exports to the US, recorded a 33% drop, from $4.8 billion to $3.2 billion. Gems and jewellery suffered the steepest fall, plunging 59.5% from $500.2 million to $202.8 million, as competitors like Thailand and Vietnam captured India’s market share.
India’s renewable energy exports also took a hit, with solar panel shipments falling 60.8%, from $202.6 million to $79.4 million. GTRI noted that India’s competitiveness has weakened sharply as China faces only 30% tariffs and Vietnam 20% on similar products.
The report also highlighted declines in chemicals, marine products, textiles, and processed agri-foods, underscoring the widespread impact of the tariff regime. Exporters have urged the government to take immediate remedial action, including enhanced interest equalisation, faster duty remission, and emergency credit support for MSME exporters struggling with shrinking margins.
GTRI cautioned that without swift policy intervention, India could lose further ground to Vietnam, Mexico, and China, even in sectors where it previously enjoyed strong competitiveness. “The latest trade data underscores a sobering reality,” the report concluded. “US tariffs have not only compressed India’s export earnings but also laid bare structural weaknesses in the country’s trade ecosystem.”
