Exports to U.S. falling owing to excessive tariffs: GTRI

“India’s exports to the U.S. are falling as excessive tariffs imposed by the Donald Trump administration have began eroding the worth competitiveness of home items in Washington,” assume tank GTRI stated on Wednesday (September 17, 2025).

“August shipments to the U.S. plunged to $6.7 billion, down 16.3% from July — the steepest month-to-month fall of 2025 — because the U.S. duties doubled to 50% by month’s finish,” it stated.

Surging merchandise exports, falling imports lower India’s August commerce deficit by half

In July, exports dipped 3.6% to $8 billion over June. The month of June had additionally seen a decline of 5.7% to $8.3 billion over May.

May 2025 was the final month of progress, as shipments to the U.S. rose 4.8% over April to $8.8 billion. In April, exports to the U.S. stood at $8.4 billion.

“The slide in exports closely tracks the rapid escalation of tariffs,” Global Trade Research Initiative (GTRI) Founder Ajay Srivastava stated.

Until April 4, Indian items entered the U.S. at regular MFN (Most Favoured Nation) charges. “From April 5, Washington imposed a common 10% tariff, which initially did not dent commerce flows as importers rushed to front-load purchases — explaining May’s export rise,” he stated.

By June, nevertheless, the sustained 10% obligation and rising discuss of country-specific measures started “eroding India’s price competitiveness”, Mr. Srivastava stated, including orders shifted to various suppliers, pulling exports down by practically 6%. “The decline deepened in July under the same tariff regime,” he stated.

“The actual blow got here in August when the tariffs shot as much as 25% on August 7, after which doubled to 50% on August 27, for many merchandise,” he stated.

“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% rate,” he stated.

He additionally stated that roughly one-third of India’s exports, together with prescription drugs and smartphones to the U.S. are tariff-exempt, which implies the efficient hit on tariff-exposed items is much deeper than headline figures counsel.

“Labour-intensive sectors akin to attire, gems and jewelry, leather-based, shrimp, and carpets are below extreme stress as a result of the U.S. accounts for 30-60% or extra of their international exports,” he stated.

According to GTRI estimates, if the 50% tariffs stay via the tip of FY 2026, India may lose $30-35 billion within the U.S. exports — a significant blow contemplating the U.S. accounts for practically 20% of India’s items exports. He recommended that the federal government ought to prolong help 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 stated.