US tariffs hit India’s exports hard; smartphones, pharma, gems lead 37% slump: GTRI

India’s exports to the United States have nosedived for the fourth consecutive month, recording a 37.5 per cent slump between May and September 2025, as escalating US tariffs continue to weigh heavily on outbound shipments, according to a new analysis by the Global Trade Research Initiative (GTRI). 

The report, released on November 2, said India’s exports to its largest trading partner fell from $8.8 billion to $5.5 billion during the five-month period — marking one of the sharpest short-term declines in recent years. 

The GTRI study compared trade data from May-September 2025 to gauge the immediate fallout of a series of tariff hikes imposed by Washington from April 2 onwards. The duties began at 10 percent, were raised to 25 percent in early August, and hit 50 percent by the end of that month on several Indian products. 

Smartphones, pharma hardest hit 

The steepest declines were seen in products that were previously tariff-free, accounting for nearly one-third of India’s total shipments to the US. These exports contracted 47 per cent, falling from $3.4 billion in May to $1.8 billion in September. 

“Smartphones and pharmaceuticals were the biggest casualties,” the think tank said. 

Smartphone exports — which had grown a stunning 197 per cent between April–September 2024 and the same period this year — collapsed 58 per cent, from $2.29 billion in May to $884.6 million in September. Shipments dropped steadily each month, from $2.0 billion in June to $964.8 million in August, before dipping further in September. 

Pharmaceutical exports also slipped 15.7 per cent, from $745.6 million to $628.3 million over the same period. 

Metals, auto parts, labour-heavy sectors feel the chill 

Industrial metals and auto components — subject to uniform tariffs for all countries — posted a relatively smaller 16.7 per cent drop, from $0.6 billion to $0.5 billion. Aluminium exports fell 37 per cent, copper 25 per cent, auto parts 12 per cent, and iron and steel 8 per cent. 

“Because all global suppliers faced similar duties, the dip appears linked more to a slowdown in US industrial activity than to any loss in Indian competitiveness,” the GTRI report observed. 

Labour-intensive sectors such as textiles, gems and jewellery, chemicals, agri-foods, and machinery, which together make up nearly 60 per cent of India’s exports to the US, recorded a 33 per cent fall — from $4.8 billion in May to $3.2 billion in September. 

Gems and jewellery shipments collapsed 59.5 per cent, from $500.2 million to $202.8 million, dealing a blow to manufacturing hubs in Surat and Mumbai. The report said Thailand and Vietnam have captured a significant portion of India’s lost US orders. 

Solar panels, chemicals, seafood exports also plunge 

Exports of solar panels — once a growing segment in India’s renewable energy exports — plunged 60.8 percent, from $202.6 million to $79.4 million. GTRI attributed this to a sharp loss of competitiveness as China faced only 30 percent tariffs and Vietnam 20 per cent on similar products. 

Chemical, marine and seafood, textile, and processed food exports also showed marked declines, the report added. 

Exporters are now pressing for immediate policy support to weather the crisis. “Priority measures include enhanced interest-equalisation support to lower financing costs, faster duty remission to ease liquidity pressures, and emergency credit lines for MSME exporters,” GTRI said. 

Without urgent intervention, India risks losing market share to Vietnam, Mexico, and China — even in sectors where it traditionally held an edge. 

“The latest data make one point clear,” GTRI concluded. “Tariffs have not only squeezed India’s trade margins but also exposed structural vulnerabilities across key export industries.”