Trump’s 50% tariffs hit Indian exports hard, with unexpected declines in smartphones, pharmaceuticals, and other duty-free products
India’s exports to the United States have fallen sharply amid escalating tariffs imposed by the Trump administration, according to an analysis by the Global Trade and Research Initiative (GTRI). Between May and August 2025, total exports dropped 22.2%, from $8.8 billion to $6.9 billion, reflecting both tariffed and tariff-exempt goods. Surprisingly, even smartphones—which face no US tariffs—saw a steep decline of 58%, from $2.29 billion in May to $964.8 million in August, reported timesofindia.indiatimes.com.
GTRI founder Ajay Srivastava noted that the phased increase in US tariffs—from 10% in early August to 50% by month-end—explains much of the drop in heavily taxed goods like textiles, shrimp, chemicals, and solar panels. However, tariff-exempt items like smartphones, pharmaceuticals, and certain metals also experienced significant reductions, suggesting additional factors such as reduced US demand, supply chain disruptions, and component shortages in Indian assembly plants.
The decline in exports spans labour-intensive sectors, electronics, textiles, gems, seafood, and chemicals, raising alarms over India’s trade performance and prompting calls for government intervention
Sector-wise highlights:
- Smartphones: Declined 58% from $2.29B to $964.8M; major exporters include Foxconn and Tata Electronics.
- Pharmaceuticals: Dropped 13.3% to $646.6M.
- Metals & Auto Components: Relatively stable; aluminum fell 19%, iron & steel 13.1%, copper 10.2%, auto components 2%.
- Labour-intensive exports (62.7% of US exports): Fell 10.8% from $4.82B to $4.30B.
- Gems & Jewellery: Jewellery exports down 9.1%; diamond-studded gold jewellery fell 25.5%, cut & polished diamonds down 15.2%, while lab-grown diamonds rose 40.7%.
- Solar Panels: Reduced 34.6% amid competition from China (30% tariffs) and Vietnam (20% tariffs).
- Seafood (shrimp): Fell 43.8%, impacting coastal employment.
- Textiles & Garments: Total decline 9.3%; girls’ suits -45.4%, cotton dresses -66.7%. Home textiles rose 14.2%.
- Chemicals: Dropped 15.9%; agrochemicals down 26.7%, essential oils and cosmetics -8.8%.
- Agriculture & Food Products: Broad decline; edible oils fell 69.7%, dairy -31.1%, processed food -13.9%.
GTRI warns that the collapse in duty-free exports is “alarming and counterintuitive” and calls for urgent investigation into production shifts, US consumer behaviour, and supply chain issues. Industry associations are advocating government intervention through interest equalisation schemes, duty remission, and financial support to sustain India’s PLI programme and broader export goals.
