New Delhi | India's exports to the US are falling as high tariffs imposed by the Trump administration have started eroding the price competitiveness of domestic goods in Washington, think tank GTRI said on Wednesday.
August shipments to the US plunged to USD 6.7 billion, down 16.3 per cent from July -- the steepest monthly fall of 2025 -- as US duties doubled to 50 per cent by month's end, it said.
In July, exports dipped 3.6 per cent to USD 8 billion over June. The month of June had also seen a decline of 5.7 per cent to USD 8.3 billion over May.
May 2025 was the last month of growth, as shipments to the US rose 4.8 per cent over April to USD 8.8 billion. In April, exports to the US stood at USD 8.4 billion.
"The slide in exports closely tracks the rapid escalation of tariffs," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said.
Until April 4, Indian goods entered the US at normal MFN (most favoured nation) rates. From April 5, Washington imposed a universal 10 per cent tariff, which initially failed to dent trade flows as importers rushed to front-load purchases -- explaining May's export rise, he said.
By June, however, the sustained 10 per cent duty and growing talk of country-specific measures began "eroding India's price competitiveness", Srivastava said, adding orders shifted to alternative suppliers, pulling exports down by nearly 6 per cent.
"The decline deepened in July under the same tariff regime," he said.
The real blow came in August when the tariffs shot up to 25 per cent on August 7, and then doubled to 50 per cent on August 27, for most products, he said.
"This left little room for exporters to adjust, resulting in the sharpest month-on-month contraction yet. September is expected to show an even steeper fall, as it will be the first month fully exposed to the 50 per cent rate," he said.
He also said that roughly one-third of India's exports, including pharmaceuticals and smartphones to the US are tariff-exempt, which means the effective hit on tariff-exposed goods is far deeper than headline figures suggest.
Labour-intensive sectors like apparel, gems and jewellery, leather, shrimp, and carpets are under severe stress because the US accounts for 30-60 per cent or more of their global exports, he said.
According to GTRI estimates, if the 50 per cent tariffs remain through the end of FY 2026, India could lose USD 30-35 billion in US exports -- a major blow considering the US accounts for nearly 20 per cent of India's goods exports.
He suggested that the government should extend support measures to exporters.
"Without quick relief, the prolonged tariff wall could lead to job losses and weaken its overall trade performance heading into 2026," he said.
