Exports from India to the United States have plunged by 28.5% between May and October 2025, following steep tariff hikes by the US. The Global Trade Research Initiative (GTRI) warns that aggressive duties have made Indian goods among the most heavily taxed in the US, severely affecting sectors such as textiles, gems, solar panels and engineering exports. In response, GTRI urges the Indian government to rapidly operationalize its export support schemes and launch a full-fledged Export Promotion Mission. Focus Keyphrase: India exports hit by US tariffs 2025.

Core Development

• According to GTRI, India’s exports to the US dropped from USD 8.83 billion in May 2025 to USD 6.31 billion in October 2025 — a decline of 28.5%. 

• The sharp decline coincides with US tariff rates on Indian goods rising from 10% in April to 25% in early August, and eventually reaching 50% by late August. 

• The tariff shock has hit nearly all export categories: tariff-exempt goods like smartphones and petroleum, commodities such as metals and auto-parts, and labour-intensive sectors like textiles, jewellery, chemicals and solar panels. 

Key Drivers / Issues

• The sudden and steep tariff escalation by the US made Indian goods costlier than those from many competitors, undermining competitiveness. 

• Labour-intensive and export-driven sectors — which operate on low margins — are particularly vulnerable to such tariff shocks. 

• Delay in the activation of government export-support schemes, despite earlier approval, has left exporters with limited buffers against the external shock. 

Stakeholder Impact

• Exporters (especially SMEs and labour-intensive units): Immediate revenue loss, order cancellations, and pressure on cash-flow and working capital.

• Workers and labourers: Job losses and wage disruptions in export-dependent sectors.

• BFSI & trade-finance institutions: Higher risk of defaults on trade-related credit, increased demand for working-capital financing and insurance products.

• Government and policymakers: Need to manage export slowdown, potential decline in export-led growth, and rising pressure to swiftly implement relief measures.

Industry & Policy Reactions

GTRI has urged the government to quickly operationalize its export-support programme (approved by the Cabinet in November) and implement clear eligibility norms and disbursement timelines. Industry bodies and trade chambers are demanding tariff relief, market-diversification support, and stronger export incentives to help mitigate the steep demand shock from the US market.

Challenges Ahead

• Rolling out export-promotion schemes rapidly and ensuring they reach the most-affected sectors.

• Diversifying export markets to reduce over-dependence on the US, amidst global trade uncertainties.

• Maintaining export competitiveness in face of global inflation, higher input costs and exchange-rate volatility.

• Ensuring liquidity and financial support for exporters under stress without compromising credit‐quality standards.

Strategic Outlook

In the short term, the government’s quick activation of support measures and targeted trade-finance facilitation could stabilise export flows. Medium to long term, India may need to accelerate diversification of export destinations, upgrade product value-chains, and strengthen trade-policy frameworks to reduce vulnerability to abrupt tariff shocks. The crisis could also push sectors to innovate, automate, and reduce reliance on tariff-sensitive markets — strengthening resilience for future headwinds.

Why This Matters

The sharp fall in exports to the US — India’s largest export destination — is a serious setback for the trade ecosystem. It threatens jobs, export-led growth momentum and financial-sector stability. The call for an export-promotion mission underscores the urgent need for structural policy support, export diversification and resilient trade-finance infrastructure.