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<ul>
 <li>India’s U.S.-bound exports plunged as tariff hikes up to 50% drove a five-month contraction.</li>
 <li>Tariff-exempt shipments fell amid market uncertainty, with smartphones seeing steep losses.</li>
 <li>Labour-intensive goods faced the heaviest strain, losing $1.5B in exports, May to October.</li>
</ul>
India’s exports to the United States dropped sharply between May and October 2025 after Washington lifted tariffs to 50%, hitting labour-intensive sectors and slowing tariff-exempt growth. The fall began as the U.S. revised duties in April and continued through late August, according to the Global Trade Research Initiative (GTRI). This pushed India into its toughest export pressure in ten years.
<h2 id="strong-tariff-hikes-drive-steep-decline-in-shipments-strong">Tariff Hikes Drive Steep Decline in Shipments</h2>
The <a href="https://timesofindia.indiatimes.com/business/india-business/tariff-shock-indian-exports-to-us-crash-28-5-gtri-warns-labour-heavy-sectors-hurt-most-urges-quick-policy-action/articleshow/125655440.cms" rel="noopener noreferrer nofollow">decline</a> involved a fast escalation in U.S. duties that changed India’s position in the market. The tariff rate started at 10% on April 2, moved to 25% on August 7, and then climbed to 50% by late August. This led to a 28.5% drop in exports, with shipments falling from $8.83 billion in May to $6.31 billion in October.
This steep rise made Indian goods among the most heavily taxed in the U.S. According to GTRI, Chinese goods faced about 30% in duties, while Japanese goods faced about 15%. This contrast showed how sharply India’s burden increased. It also framed the strain on sectors that relied on steady access to the U.S. market.
The report separated the export impact into three tariff groups to track the pressure more clearly. This breakdown showed notable variation across product lines and helped explain the wider drop. It also revealed how even items exempt from tariffs struggled under the broader disruption.
<h2 id="strong-tariff-exempt-and-uniform-tariff-goods-strong">Tariff-Exempt and Uniform Tariff Goods</h2>
Tariff-exempt goods represented 40.3% of India’s U.S. shipments in October, including smartphones, pharmaceuticals, and petroleum products. However, they still saw a 25.8% decline during the period.
The segment fell from $3.42 billion in May to $2.54 billion in October. The drop occurred as buyers adjusted to market uncertainty and shifting landed costs. Smartphones, India’s largest product line, posted the sharpest fall within this group. Shipments moved from $2.29 billion in May to $1.50 billion in October, a 36% slide.
Monthly data showed a steep progression: $2.0 billion in June dropped to $1.52 billion in July, then collapsed to $964.8 million in August. Exports fell even more to $884.6 million in September, but then picked back up to $1.5 billion in October.
Pharma exports slipped a little, by 1.6%, while petroleum exports went down by 15.5%. These changes match what GTRI said, that even the normally steady sectors started feeling the pressure once the new tariffs began affecting trade.
In October, items that face the same tariff globally made up 7.6% of India’s exports to the <a href="https://cryptotale.org/sp-500-soars-amid-tariffs-is-crypto-ready-for-growth/" rel="noopener noreferrer nofollow">U.S</a>. This segment included iron, steel, aluminum, copper, and auto parts. These products faced the same tariff treatment across suppliers, yet exports still contracted.
According to GTRI data, shipments fell 23.8%, sliding from $629 million in May to $480 million in October. The think-tank attributed this to weak U.S. industrial demand rather than tariff targeting.
Related: <a href="https://cryptotale.org/trump-and-xi-trim-tariffs-crypto-market-reacts/" rel="noopener noreferrer nofollow">Trump and Xi Trim Tariffs, Crypto Market Reacts</a>
<h2 id="strong-labour-intensive-sectors-bear-the-hardest-impact-strong">Labour-Intensive Sectors Bear the Hardest Impact</h2>
The most severe decline appeared in labour-intensive goods that faced the full 50% <a href="https://cryptotale.org/trump-announces-new-100-tariff-plan-against-china/" rel="noopener noreferrer nofollow">U.S. tariff</a> rate. This group included gems and jewellery, solar panels, textiles, garments, chemicals, and seafood. These products accounted for 52.1% of October shipments and showed the deepest contraction.
Exports in this segment dropped 31.2% falling from $4.78 billion in May to $3.29 billion in October. This erased nearly $1.5 billion in shipments within five months. GTRI said this category absorbed the harshest shock since the tariff hikes applied exclusively to India.
The report also pointed to stalled support programs that slowed the country’s response. According to GTRI, the Export Promotion Mission remained inactive despite approval on November 12. The group said long-running schemes such as the Market Access Initiative and the Interest Equalisation Scheme made no payments this year.
It noted that delays limit relief to MSMEs and first-time exporters. GTRI urged the removal of the extra 25% Russia-linked duty on Indian goods, saying its rollback would cut the effective U.S. tariff load to 25%.
Meanwhile, India’s exports to the US recorded a major setback as Washington’s tariff hikes reshaped trade flows. The impact spread across exempt goods, uniform tariff items, and labour-intensive sectors. The data showed tariff pressure, stalled schemes, and declining product groups that defined India’s five-month export contraction.
Read more on <a href="https://cryptotale.org/u-s-tariff-shock-hits-india-as-exports-sink-28-5/" rel="noopener noreferrer nofollow">CryptoTale.</a>

U.S. Tariff Shock Hits India as Exports Sink 28.5%

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