Mumbai: India’s trade with the United States has begun to feel the brunt of U.S. President Donald Trump’s aggressive tariff policy, as exports from the country fell sharply over the summer months. According to the Global Trade and Research Initiative (GTRI), India’s shipments to the U.S. declined by 22.2 percent between May and August 2025, signaling the first clear impact of the high-tariff regime on Indian exporters.
In May 2025, exports to the United States totaled $8.8 billion, but by August, this figure had fallen to $6.9 billion. The decline affected several key sectors, even those not directly targeted by tariffs, highlighting broader market disruptions. Smartphone exports, for instance, which were exempt from the levies, experienced fluctuations as Indian manufacturers accelerated shipments ahead of anticipated increases in tariffs, attempting to safeguard market share.
The slowdown in exports comes at a time when the Indian rupee is under pressure, hitting record lows against the U.S. dollar. On Tuesday, the rupee opened at Rs 88.41, slipped to Rs 88.82 during trading, and finally settled at Rs 88.75 per dollar, surpassing the previous low of Rs 88.45. Analysts attribute the depreciation not only to trade disruptions but also to rising costs for H1B visas and broader uncertainties in bilateral trade relations.
Economists warn that if the U.S. maintains or escalates tariffs, India could face longer-term setbacks in exports, particularly in sectors like textiles, engineering goods, and electronics. Some industry leaders have suggested diversifying markets to reduce dependence on the U.S., while others hope for diplomatic negotiations to ease tensions and stabilize trade flows.
For now, exporters are navigating an increasingly complex environment, balancing the impact of tariffs, currency fluctuations, and global economic uncertainty. As GTRI notes, the months ahead will be crucial in determining whether India can sustain its trade volumes or if a deeper contraction is on the horizon.