India's Exports To US Plunge As Tariff Hikes Persist: GTRI

(MENAFN- KNN India) New Delhi, Sep 18 (KNN) India's merchandise exports to the United States registered a steep decline in August as higher tariffs imposed by the Donald Trump administration eroded the price competitiveness of Indian goods, according to the Global Trade Research Initiative (GTRI).

Exports to the US fell to USD 6.7 billion in August, down 16.3 percent from July - the sharpest monthly fall of 2025. This followed a 3.6 percent dip in July and a 5.7 percent fall in June. The last month of growth was May, when shipments rose 4.8 percent to USD 8.8 billion.

"The slide in exports closely tracks the rapid escalation of tariffs," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said, according to PTI.

Until April 4, Indian goods were entering the American market under normal Most Favoured Nation (MFN) rates.

The US imposed a 10 percent universal tariff from April 5, which initially had little effect as importers rushed orders. However, by June, the sustained levy began eroding competitiveness, pushing orders toward alternative suppliers.

The pressure intensified in August, when tariffs rose to 25 percent on August 7 and doubled to 50 percent on August 27 for most product categories.

“This left little room for exporters to adjust, resulting in the sharpest contraction yet,” said Srivastava, adding that September figures could show an even steeper fall as the full impact of the 50 percent duty takes effect.

While pharmaceuticals and smartphones - accounting for about one-third of India's shipments to the U.S. - remain tariff-exempt, GTRI noted that labour-intensive sectors such as apparel, gems and jewellery, leather, shrimp, and carpets are under severe stress.

These industries rely on the U.S. for 30–60 percent of their exports.

GTRI warned that if the 50 percent tariffs continue through FY 2026, India could lose USD 30–35 billion in export earnings from its largest trading partner, which accounts for nearly 20 percent of the country's goods exports.

Srivastava suggested targeted government support to cushion exporters from the prolonged tariff impact.

"Without quick relief, the prolonged tariff wall could lead to job losses and weaken its overall trade performance heading into 2026," he said.

(KNN Bureau)

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