New Delhi. Trade between India and America is generally considered to be a story of stability and growth, but in the intervening months of 2025, this story seemed to be going in the opposite direction. When US tariffs were low, India’s exports slipped sharply and when tariffs increased, there was a partial recovery in exports.
A study by the Global Trade Research Initiative, a trade monitoring think tank, shows that between May and November 2025, India’s exports to the US showed a two-phase pattern, first a sharp decline and then limited recovery. This pattern makes this entire period unusual.
Why did exports fall from May to September?
According to the report, India’s exports to America were $8.8 billion in May 2025, which fell to $5.5 billion by September. That means a huge decline of about 37.7 percent in just four months. The special thing is that the tariffs were not very high during this period. The tariff remained at 10 percent in May, June and July, the same level was in the beginning of August also. Despite this, a sharp decline was recorded in exports. GTRI believes that the main reason for this was the fear of tariff increase. American buyers and Indian exporters feared that costs would rise sharply in the coming months, so new orders were postponed and the focus was on liquidating old stocks.
September became the lowest point
September 2025 was the month when 50 percent tariff remained in force in America for the entire month and during this period India’s exports reached the lowest level. Generally it is expected that exports will fall further as soon as higher tariffs are imposed, but here the story took a different turn. The decline stopped after September and by November the figures started showing improvement.
How did the increase in tariffs come about?
According to GTRI, between September and November, India’s exports to America increased by about 27.3 percent and it reached $7.0 billion in November. The report shows that about 85 percent of the total exports in November came from those sectors which first declined and then showed recovery. Gems and jewelery is a great example of this. The exports of this sector were 500.2 million dollars in May, which fell to 202.8 million dollars in September. After this, it increased again to $406.2 million in November.
In which sectors was this pattern seen?
According to GTRI, the same trend was also seen in electronics, especially smartphones, machinery, vehicles and auto components, pharma, textiles and garments, carpets, mineral fuels, organic chemicals, plastics, rubber products, fish, dairy and edible fruits and nuts. In all these sectors, first a sharp decline and then limited improvement was recorded.
Why did GTRI call it unique?
GTRI has clearly said that generally exports increase in lower tariffs and there is pressure in higher tariffs, but here the opposite happened. The report said that India’s exports fell more during the low-tariff period and partially recovered after the implementation of higher tariffs, which is an unusual pattern.
How strong is this recovery
GTRI has warned that the recovery seen after September is not a sign of any permanent improvement. According to the report, American buyers and Indian exporters accepted the increased tariffs by renegotiating prices, bearing some costs themselves and increasing focus on products for which substitutes were not easily available. Shipments were also supported by stock replenishment and supply chain adjustments ahead of the US holiday season in sectors such as electronics and machinery.
