India’s trade with its largest partner, the United States, has faced a sharp contraction, with exports plunging to a 10-month low of $5.47 billion in September. This analysis reveals a trade reversal, primarily caused by escalating trade tensions and steep tariffs imposed by the Trump administration in August.
This data assumes significance as India and the United States reportedly approach the final stages of negotiating a bilateral trade agreement.
Total Indian exports to the US fell from a recent peak of $10.2 billion in March to less than $5.5 billion in September, a drop of nearly 46 percent over six months. This slump represents the lowest export figure since November 2024 when the value of India’s exports to the US were $5.7 billion.
India’s imports from the US, however, have increased 11 percent in September compared to the same period last year.
The analysis further reveals that the decline in exports is mainly from India’s labour-intensive industries such as gems and jewellery, textiles and agricultural products.
Exports of pearls, precious and semiprecious stones saw a considerable year-on-year collapse of 76.7 percent in September. Similarly, gold and other jewellery shipments fell 71.1 percent compared to September 2024, underscoring severe pressure on manufacturing hubs like Surat and Mumbai.
Other traditional exports also recorded double-digit declines, including cotton fabrics (-36.3 percent), spices (-45 percent), agricultural products (-35.5 percent) and essential raw materials like plastic sheets (-50.7 percent) and plastic products (-47.6 percent).
An earlier Forbes India analysis highlighted that India’s decline in US exports across these major sectors could benefit several European and developing Asian economies.
However, a handful of high-tech and industrial sectors have demonstrated some growth in exports. For instance, a surge in exports was observed in computer hardware which increased by 522.7 percent year-on-year in September. Other segments showing robust growth include optical items (up 336.1 percent) and telecom instruments (up 218.9 percent). However, the telecom export figures fell short of the March peak of $2.4 billion.
Similarly, while the exports of electronic components show a 38 percent (y-o-y) increase in September to $170 million, this total represents the lowest monthly figure recorded in the last six months.
Policy support and increased manufacturing activity, specifically under schemes like the Production Linked Incentive (PLI) scheme, have fuelled booming exports of electronics, particularly Indian-assembled smartphones, to meet strong demand in the US market.
Furthermore, established heavy industries like iron and steel (up 31 percent), aluminium (up 26.8 percent), and drugs (up 22.1 percent) maintained steady growth, suggesting that India continues to be a crucial supplier of industrial and essential goods, even under tightened trade conditions.
First Published: Nov 03, 2025, 20:10
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