Indian Exports to US Plunge 28.5% Following Aggressive Tariff Hikes
Indian exports to the United States have suffered a severe blow. A new report shows a dramatic 28.5 percent drop in shipments between May and October 2025. This sharp decline is a direct result of aggressive tariff increases imposed by the US government. The new duties have made Indian products significantly more expensive for American buyers.
Labor-Intensive Sectors Bear the Brunt of the Decline
The impact is not spread evenly across all industries. According to the Global Trade Research Initiative (GTRI), labor-heavy sectors are being hurt the most. These industries include textiles, apparel, leather goods, and agricultural products. These sectors employ millions of workers in India. A sustained export drop could lead to widespread job losses and economic hardship in these communities.
For example, a small business making handmade garments might have seen its main American client cancel a large order. The reason is simple. The new tariffs made the products too expensive. The client may now be sourcing from a country with lower or no tariffs. This scenario is repeating across many labor-intensive export businesses.
Competitiveness Eroded by High Tariffs
The core of the problem is a sudden loss of competitiveness. US tariff hikes have placed a heavy tax on Indian goods. This makes them more expensive than similar products from other countries. Competitors like Vietnam and Bangladesh often benefit from more favorable trade terms with the US. Their goods can enter the American market at a lower cost, giving them a major advantage.
An Indian company selling furniture now faces a steep tariff wall. Its products are suddenly 25 percent more expensive than furniture from a competing nation. The American importer will almost certainly choose the cheaper option. This price disadvantage is causing a rapid loss of market share for Indian exporters.
Export Promotion Schemes Lag Behind
Compounding the tariff problem are delays in government support. India has export promotion schemes designed to help businesses. These programs can offer financial incentives to offset some costs. However, reports indicate a significant delay in operationalizing these schemes.
This means help is not reaching exporters when they need it most. A leather goods exporter cannot wait six months for a promised rebate. They need immediate support to match the prices of international rivals. The delay is hindering recovery efforts and prolonging the pain for the export sector.
What This Means for Investors
For investors, this situation requires close attention. Companies heavily reliant on US exports are facing clear headwinds. Their revenue and profitability are under immediate threat. It is crucial to assess how individual companies are adapting. Some may be trying to shift production to other countries. Others might be focusing on new markets in Europe or Asia.
The health of the broader Indian economy is also tied to strong exports. A prolonged export slump could affect economic growth figures. This may influence government policy and central bank decisions. Investors should watch for new trade agreements or government measures aimed at countering these tariffs. The response from New Delhi will be critical in determining how quickly the export sector can recover.
The next few months will be a crucial test for Indian exporters and policymakers alike. Finding a way to restore competitiveness is the urgent challenge.
