India's US Export Crisis: How Trump Tariffs Caused 37.5% Collapse

India's exports to its largest market, the United States, are reeling under the weight of steep US tariff hikes.

Between May and September 2025, exports plunged by 37.5 per cent, from USD 8.8 billion to USD 5.5 billion, marking one of the sharpest short-term collapses in years, GTRI said in a note Sunday.

The GTRI analysis compared export performance between May and September 2025 to assess the immediate fallout of US tariffs imposed from April 2 onward.

These duties began at 10 per cent, rose to 25 per cent on August 7, and reached 50 per cent by late August for India.

Tariff-free products--accounting for nearly one-third of India's total shipments--saw the steepest contraction, falling 47 per cent from USD 3.4 billion in May to USD 1.8 billion in September, GTRI analysis found.

"Smartphones and pharmaceuticals were the biggest casualties," it said.

Smartphone exports, which had surged 197 per cent between April-September 2024 and the same period in 2025, crashed 58 per cent from USD 2.29 billion in May to USD 884.6 million in September.

Shipments fell month after month--USD 2.0 billion in June, USD 1.52 billion in July, USD 964.8 million in August, and finally USD 884.6 million in September, it added. "The reasons for decline are not known and need examination."

Pharmaceutical product exports slipped 15.7 per cent, from USD 745.6 million to USD 628.3 million.

Industrial metals and auto parts--subject to uniform tariffs for all countries--registered a milder 16.7 per cent decline, from USD 0.6 billion to USD 0.5 billion. Aluminium exports dropped 37 per cent, copper 25 per cent, auto parts 12 per cent, and iron and steel 8 per cent.

"Because all global suppliers faced similar duties, the dip appears linked more to a slowdown in US industrial activity than to any loss in Indian competitiveness," GTRI said.

The labour-intensive sectors such as textiles, gems and jewellery, chemicals, agri-foods, and machinery account for nearly 60 per cent of India's US exports and suffered a 33 per cent decline--from USD 4.8 billion in May to USD 3.2 billion in September, GTRI found in its analysis.

Gems and jewellery exports collapsed 59.5 per cent, from USD 500.2 million to USD 202.8 million, battering units in Surat and Mumbai as Thailand and Vietnam captured lost US orders, GTRI claimed.

Exports of solar panels plunged 60.8 per cent, from USD 202.6 million to USD 79.4 million, eroding India's renewable-energy export edge.

"With China facing only 30 per cent tariffs and Vietnam 20 percent, India's competitiveness has sharply deteriorated," GTRI said.

Chemical, marine and seafood, textiles, agri and processed foods also declined, GTRI said.

"Exporters are urging the government to respond swiftly. Priority measures include enhanced interest-equalisation support to lower financing costs, faster duty remission to ease liquidity pressure, and emergency credit lines for MSME exporters," GTRI noted.

Without urgent intervention, according to GTRI, India risks losing market share to Vietnam, Mexico, and China--even in sectors where it previously held a strong position.

"The latest data make one point clear: tariffs have not only squeezed India's trade margins but also exposed structural vulnerabilities across key export industries," GTRI concluded.

- ANI