Resilience in Indian exports

Early data shows good resilience to the Trump storm

- AJAY SHAH

The narrative on India’s economy in late 2025 is fear. The consensus is that a hostile trade regime of the United States (US) will derail our growth. The regime had two shocks: First, tariffs escalated from 25 percent in April to 50 per cent by August 27. Second, a $100,000 fee on new H-1B visa petitions began on September 21. This assault on goods and services is seen as an existential threat to Indian exports. But the data reveals a more complex, resilient picture. The early evidence does not show collapse.

To understand the impact of any shock, we must first measure the system correctly. Aggregate export figures have noisy components. The monthly trade data is distorted by volatile petroleum prices. In recent years, this has been further complicated by the geopolitical arbitrage of refining cheap Russian crude oil for reexport. This is not a story of Indian competitiveness; it is one of global politics. Similarly, trade in gold and jewellery often functions as a channel for capital flows, responding to investment flows rather than underlying productivity. A clearer signal comes from “core exports”: The monthly sum of all goods and services, in US dollars, excluding petroleum and gold. This metric reflects India’s real, value-added engagement with the global economy.

Using this core metric, the data through August shows the impact of the April “first wave” tariff. The 50 percent tariff and H1B fee impacts are not yet visible in this data. The striking fact is the absence of a collapse. Core exports, at $62.6 billion in August, remain on the upward trajectory seen since the 2020 low. The April tariff did not induce a significant deviation. While the August level is a dip from the Q2 peak, it remains structurally elevated over any period before 2024.