Tariff Shock: Indian Exports to US Plunge 28.5% in 5 Months - What's Next?

Indian

exports to the United States fell sharply by 28.5% from May to October 2025 after major tariff hikes imposed by the US government began to reshape competitive dynamics.According to the Global Trade Research Initiative, shipments dropped from $8.83 billion in May to $6.31 billion in October 2025. Over the same period, duties climbed rapidly—from 10% in April, to 25% in early August, and 50% by late August 2025. This escalation placed Indian products among the most heavily taxed in the US market, above China (~30%) and Japan (~15%).The think tank divided exports into three broad impact buckets:

• Tariff-exempt goods (smartphones, pharma, petroleum) made up 40.3% of October shipments, but declined 25.8% (May: $3.42 billion → Oct: $2.54 billion).
• Uniform tariff global commodities (iron, steel, aluminium, copper, auto parts) represented 7.6% of shipments and dropped 23.8% ($629 million → $480 million), largely tied to softer US industrial demand rather than India-specific targeting.
• Labour-intensive sectors slapped with 50% tariffs (gems & jewellery, solar panels, textiles, garments, chemicals, seafood, seafood products) saw the steepest fall—31.2%, wiping out nearly $1.5 billion in exports.

India’s smartphone exports—the country’s largest US product line—fell 36% in the period, dropping from $2.29 billion in May to $1.50 billion in October 2025, despite showing a slight rebound in October.Pharmaceutical exports were comparatively resilient, slipping only 1.6%, while petroleum products dipped 15.5%.What has compounded the issue is not just tariffs themselves—but friction between investigation authorities and policy execution timelines. The Export Promotion Mission, though announced in March 2025 and formally approved on November 12, 2025, remains non-operational, according to GTRI.“Eight months into the fiscal, no schemes are operational, while Market Access Initiative and Interest Equalisation Scheme have seen no payments,” the think tank pointed out, warning that delayed disbursals could weaken India’s export defence mechanism when it is needed most.The GTRI has urged the government to move quickly, specifically asking for:

• Immediate operationalisation of the Export Promotion Mission, backed by an outlay of ₹25,060 crore for 2025–26 through 2030–31.
• Diplomatic intervention with the US to lift a 25% Russia-linked additional duty on Indian products.
• Technical pressure on US black-box and crash investigations to respect Indian data sovereignty norms, rather than shift venue or protocol mid-probe.

The think tank claims that lifting the additional duty would cut India’s effective burden from 50% to 25%, delivering much-needed relief to labour-intensive exporters and MSMEs.India’s exports are now at a crossroads—not just in markets, but in investigative authority influence.