(MENAFN- KNN India) New Delhi, Dec 1 (KNN) India's exports to the United States fell sharply between May and October 2025, declining 28.5 per cent from USD 8.83 billion to USD 6.31 billion, according to a report released Saturday by the Global Trade Research Initiative (GTRI).

The think-tank attributed the contraction to a rapid escalation in US tariffs, which began at 10 per cent on April 2, rose to 25 per cent on August 7, and reached 50 per cent by late August.

GTRI noted that the tariff surge effectively made Indian goods among the most heavily taxed in the US market. By comparison, China faced duties of around 30 per cent and Japan 15 per cent, reported ANI.

Against this backdrop, GTRI urged the government to accelerate the rollout of the Export Promotion Mission (EPM) and push the US administration to withdraw the Russia-related additional tariff of 25 per cent imposed on Indian goods.

The organisation noted that although the EPM was announced in March and approved by the Cabinet on November 12, it remains non-operational and long-running schemes such as the Market Access Initiative and the Interest Equalisation Scheme have not made disbursals this year.

The Union Cabinet, chaired by Prime Minister Modi, earlier this month approved the EPM - a flagship programme under the Union Budget 2025–26 - with an outlay of Rs 25,060 crore through 2030–31 to boost export competitiveness, particularly for MSMEs, first-time exporters and labour-intensive sectors.

GTRI cautioned that with annual funding capped below Rs 4,200 crore, the Mission risks missing its objectives unless operational guidelines are issued swiftly and regular payments are restored.

The think-tank added that removal of the additional 25 per cent tariff could halve the effective US duty burden on Indian products and provide immediate relief to vulnerable sectors.

It urged the government to prioritise these measures to help restore export competitiveness and to re-engage with the US on a“more even footing.”

The report categorised India's exports into three tariff regimes. Tariff-exempt items - including smartphones, pharmaceuticals and petroleum products - accounted for 40.3 per cent of October shipments but still fell 25.8 per cent, dropping from USD 3.42 billion in May to USD 2.54 billion in October.

Products facing uniform global tariffs, such as iron, steel, aluminium, copper and auto parts, comprised 7.6 per cent of exports and declined 23.8 per cent, from USD 629 million to USD 480 million over the same period.

The steepest fall occurred in labour-intensive categories that alone attracted 50 per cent US duties.

Exports of gems and jewellery, solar panels, textiles and garments, chemicals and seafood contracted by 31.2 per cent, sliding from USD 4.78 billion in May to USD 3.29 billion in October - a loss of nearly USD 1.5 billion in five months.

Even tariff-free product lines were hit. Smartphone exports, India's largest single item to the US, declined 36 per cent, falling from USD 2.29 billion in May to USD 1.50 billion in October. Monthly shipments, GTRI said, dropped steadily from USD 2.0 billion in June to USD 964.8 million in August before partially recovering to USD 1.5 billion in October.

Pharmaceutical exports fell a modest 1.6 per cent, while petroleum product shipments were down 15.5 per cent.

In the metals and auto parts segment, where US tariffs were applied uniformly across suppliers, the decline reflected subdued American industrial demand rather than a competitiveness loss, the think-tank observed.

(KNN Bureau)

MENAFN01122025000155011030ID1110420793