India’s exports to the US collapse as 50% tariffs weigh on

India’s exports of goods to the US, its biggest foreign market, plunged 20 percent in September and nearly 40 percent in the past four months after Trump’s steep tariffs took effect, the data showed.

September was the first full month of Washington’s 50 percent tariffs on Indian goods, which took effect on August 27. This includes a 25% penalty for Delhi’s refusal to stop buying oil from Russia.

“The US has become India’s worst-hit market since the tariff escalation began,” said Ajay Srivastava of the Global Trade Research Initiative (GTRI), a Delhi-based think tank.

Negotiations are currently underway for a trade agreement between the two countries, with the aim of concluding the agreement by next month.

According to GTRI, the most significant impact of the tariffs was felt by labour-intensive sectors such as textiles, gems and jewellery, engineering goods and chemicals, which suffered the heaviest losses.

Shipments to the US have seen four consecutive months of decline and were down 37.5%, from $8.8bn (£6.5bn) in May to $5.5bn in September.

A decline in exports has also contributed to India’s trade deficit (the difference between what a country imports and exports), which widened to a 13-month high of $32.15 billion in September.

Some of the decline in exports to the US was offset by improved trade with countries such as the UAE and China.

Trade negotiations between India and the US resumed last month after months of delays due to a number of differences. An Indian delegation is currently in the US for talks.

On Wednesday, Trump said Indian Prime Minister Narendra Modi had agreed stop buying Russian oilas the US tries to put economic pressure on the Kremlin as part of efforts to end the war in Ukraine.

A spokesman for India’s foreign ministry said discussions were “continuing” with the US administration, which had “shown interest in deepening energy cooperation with India”.

But major barriers to trade remain, including access to agriculture and dairy products.

For years, Washington has pushed for greater access to India’s agricultural sector, seeing it as a major untapped market. But India fiercely defended it, citing the food security, livelihoods and interests of millions of small farmers.

Until recently, the US was India’s largest trading partner, with bilateral trade reaching $190 billion in 2024. Trump and Modi have set a goal of more than doubling that figure to $500 billion.

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