India's Export Resilience: How November Trade Data Defies US Tariff Shock

According to Aditi Nayar, Chief Economist, ICRA Ltd, "Following supply normalisation after the holidays and decreased demand post the festive season, merchandise exports rose and imports declined sharply, compressing the trade deficit to a five-month low of US$24.5 billion in November 2025 from US$41.7 billion in October 2025 and US$31.9 billion in November 2024."

"With the increase in the average merchandise trade deficit in October-November 2025, we estimate the current account deficit to widen to US$20-24 billion in Q3 FY2026 from US$11-12 billion each in Q3 FY2025 and Q2 FY2026," she said.

As per GTRI, "India's exports to the United States in 2025 followed an unusual path as U.S. tariffs rose sharply. Shipments initially held up despite a 10 per cent reciprocal duty, increasing from $8.4 billion in April to $8.8 billion in May, before easing slightly in June and July. The impact became clear in August, when exports fell to $6.8 billion as tariffs were raised in quick steps, eventually reaching 50 per cent by the end of the month. In September, the first full month under the higher tariff, exports dropped further to $5.5 billion, the lowest level of the year."

"The surprising development came afterwards. Even with 50% tariffs still in place, exports recovered to $6.3 billion in October and $7.0 billion in November. This rebound suggests that exporters may have shifted toward products less affected by tariffs. Detailed product data for November are not yet available, but tariff-exempt items such as smartphones and pharmaceuticals may have helped cushion the blow," GTRI added.

GTRI further said India's rebound in exports to the US should strengthen, not soften, its negotiating stance. New Delhi has a strong case to press Washington to cut tariffs from 50% to 25%, especially after India substantially reduced imports of Russian crude, addressing a key US concern.

"India must also insist on a balanced trade agreement, and resist pressure to concede on non-trade issues, whether diluting data protection laws, opening the door to inventory-based e-commerce models, or accepting GM agricultural products. Export resilience is a signal of bargaining power," it said.

Pankaj Chadha, Chairman, EEPC India, said, "Cumulatively, the total engineering goods exports recorded 4.25% year-on-year growth in the April-November period of the current financial year and stood at US$79.74 billion."

"The latest numbers are quite encouraging, especially in light of the 50% punitive tariff imposed by the Trump administration on the bulk of items in India's export basket. The strong performance in November 2025 shows the resilience of the engineering industry and also how it has been swiftly adapting to the evolving global situation with constant support from the government."

"Going forward, we hope that the Indian engineering sector will successfully diversify its market," he said.

Speaking on the trade deficit, Rajeev Juneja, President, PHDCCI, highlighted that the key drivers of merchandise export growth in November 2025 included iron ore (70%), cashew (57%), oil meals (40%), electronic goods (38%), and coffee (34%), among others. Despite global headwinds, India registered positive export growth with 14 out of its 20 major trading partners, reflecting increasing diversification and resilience in external trade.

Looking ahead, Ranjeet Mehta, CEO & Secretary General, PHDCCI, said that India's exports are expected to continue on a resilient growth trajectory, supported by sustained government efforts to diversify export markets and enhance global competitiveness.

He noted that the government's Export Promotion Mission (EPM) and deeper engagement across regions, including the US, EU, Gulf Cooperation Council (GCC), and Asia-Pacific, will play a pivotal role in propelling India's export growth.

India's trade deficit narrowed to USD 24.53 billion in November from USD 41.68 billion in October, according to government data released on Monday. This was driven by a fall in gold, oil and coal imports, it said.

- ANI