US TARIFFS HIT INDIA'S VITAL EXPORTS HARD

US President Donald Trump’s punitive tariffs have hit Indian exporters hard, and the damage deepened after an additional 25% penalty came into effect on 27 August.

- BY PRAGYA SRIVASTAVA

The impact was clear in September, when exports to the US plunged 12% year-on-year. Detailed commerce ministry data released last week revealed which sectors bore the brunt and which managed to offset the losses in India’s largest export destination. TheUS share in India’s total exports dropped sharply from its June high of nearly 24% to just 15% in September. Despite this decline, the US remained India’s largest market, but it shifted from a growth driver to a drag on overall export performance.

TARIFF TOLL

INDIA'S EXPORTS still grew 6.7% year-on-year in September, thanks largely to efforts to find alternative markets. Shipments rose 24.3% to the United Arab Emirates (UAE), 34% to China, 17.7% to Hong Kong, 11.9% to the UK, 21.9% to Bangladesh, and 150.8% to Spain, among others. These gains helped offset the steep decline in the US. Even so, given the US's weight in India's export basket, the drag was substantial-it alone pulled overall growth down by 4.2 percentage points, a sharp reversal from its earlier role as a key support.

Until August, the US had been a net positive, boosting India's exports, most notably in January when Trump assumed office and in March amid front-loading ahead of the 2 April reciprocal tariffs. Barring a few categories such as petroleum products, ores and minerals, and electronic goods (which enjoyed tariff exemptions), nearly every other sector saw exports to the US fall in September.

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