India's exports to US plunge as Trump's 50% tariffs bite

October 16, 2025

India's goods exports to the US fell significantly by 20% in September and nearly 40% over four months following the implementation of 50% tariffs by the US on August 27, which included a 25% penalty for India's Russian oil purchases. According to the Global Trade Research Initiative (GTRI), labor-intensive sectors like textiles, gems, engineering goods, and chemicals have been most severely affected, contributing to India's widening trade deficit which reached a 13-month high of $32. 15 billion in September.

Who is affected

Indian exporters, particularly in labor-intensive sectors such as textiles, gems and jewelry, engineering goods, and chemicals
Small farmers in India whose interests are being protected in trade negotiations
India's overall economy as the trade deficit has widened to a 13-month high
US-India bilateral trade relationship, which was valued at $190 billion in 2024

What action is being taken

Trade negotiations between India and the US are currently underway with an Indian delegation in the US for talks
Discussions are ongoing with the US administration regarding energy cooperation
India is cushioning some export losses to the US through improved trade with countries like the UAE and China

Why it matters

The US is India's largest foreign market, and the steep tariffs are severely impacting India's export economy
The widening trade deficit has reached a 13-month high of $32.15 billion in September
The bilateral trade relationship is significant, having reached $190 billion in 2024 with ambitions to grow to $500 billion
The dispute touches on geopolitical issues including India's oil purchases from Russia amid the Ukraine war

What's next

Negotiations for a trade deal between the two countries aim to conclude an agreement by next month
Trump and Modi have set a target to more than double bilateral trade from $190 billion to $500 billion

Read full article from source: BBC