India’s exports to the United States have seen a sharp downturn in recent months, marking one of the steepest declines in recent trade history. Between May and September 2025, exports fell by 37.5%, dropping from USD 8.8 billion to USD 5.5 billion, largely due to the 50% tariff imposed by the U.S. on most Indian goods.
The decline, detailed in a recent GTRI report, underscores growing concerns about India’s export competitiveness in its largest market.
1. Export Decline Overview
| Month (2025) | Export Value (USD Billion) | Monthly % Change |
|---|---|---|
| May | 8.8 | — |
| June | 8.3 | -5.7% |
| July | 8.0 | -3.6% |
| August | 6.9 | -13.8% |
| September | 5.5 | -20.3% |
| Total Drop (May–Sep) | — | -37.5% |
Key Observation:
The steepest month-on-month fall occurred in September 2025, reflecting the compounded effect of tariffs and declining U.S. demand.
2. Impacted Sectors
The tariff imposition has hit India’s labour-intensive and export-driven sectors the hardest.
| Sector | Impact Level | Remarks |
|---|---|---|
| Textiles | High | Sharp decline in apparel and fabric exports due to higher import duties. |
| Gems & Jewellery | High | U.S. is a key market; demand dampened due to cost escalation. |
| Engineering Goods | High | Metal and machinery exports saw significant reduction. |
| Chemicals | Moderate | Tariffs made exports less competitive in price-sensitive markets. |
Overall Effect:
These four sectors account for over 60% of India’s total exports to the U.S., amplifying the overall decline.
3. Broader Economic Implications
- Competitiveness at Risk: The high tariff barrier has raised concerns about India’s global cost competitiveness.
- Manufacturing Slowdown: Export-oriented industries may face production cuts and reduced workforce utilization.
- Trade Deficit Pressure: The fall in U.S. exports could widen India’s trade deficit, especially if imports remain stable.
- Policy Reassessment: The GTRI (Global Trade Research Initiative) has recommended urgent policy reviews to safeguard India’s trade interests.
4. Looking Ahead: Key Factors Influencing Future Export Trends
While short-term challenges persist, several structural and global developments could shape India’s export recovery trajectory.
| Influencing Factor | Potential Impact on Exports |
|---|---|
| Tariff Adjustments | Possible rebound if the U.S. revises or relaxes current tariffs. |
| New Trade Agreements | Bilateral or multilateral deals could reopen market access. |
| Global Economic Recovery | Increased consumption in major markets may boost export demand. |
| Sectoral Growth (Tech, Pharma, Textiles) | Sector-specific performance may offset losses in others. |
| Manufacturing Competitiveness | Enhanced supply chain efficiency could restore pricing advantage. |
| Sustainability Demand | Growth in green and ethical trade could open niche markets. |
| Domestic Policy Support | Export subsidies and fiscal incentives can strengthen resilience. |
5. Conclusion
India’s 37.5% decline in exports to the U.S. serves as a critical reminder of how global trade policies can swiftly impact emerging economies. The 50% U.S. tariff has not only reduced export volumes but also strained key sectors that form the backbone of India’s external trade.
However, with strategic policy recalibration, diversification of markets, and increased focus on manufacturing competitiveness, India can stabilize its export momentum. Strengthening trade diplomacy and pursuing sustainable production models will be essential for regaining lost ground and ensuring long-term export resilience.
Glottis Limited 
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