Surprise uptick despite harsh tariffs
In a striking display of export resilience, Indian sellers logged exports to the United States amounting to more than US$20 billion in the current calendar year, despite the imposition of steep tariffs by the Donald Trump administration—up to 50 % in some cases. While the tariffs raised concerns of major export disruption, the rebound — especially among e‑commerce platforms and smaller manufacturing hubs — suggests that Indian exporters are finding workarounds and benefiting from a partial easing of bilateral trade frictions.
What the tariffs mean and how India responded
In August 2025, the U.S. announced tariffs of 50 % on certain Indian goods, part of a broader trade dispute encompassing India’s energy imports, manufacturing access and reciprocity demands. Analysts estimated that these measures could hit more than half of India’s exports to the U.S. by value. In response, India ramped up strategic measures: diversifying export destinations, reinforcing its e‑commerce export platforms, and pursuing a trade‑deal framework that would reduce its own import tariffs as part of leverage.
Key drivers of export growth
- E‑commerce strength: According to Amazon, Indian sellers have collectively exported over US$7 billion just this year through its global‑selling programmes, with the U.S. as the top destination.
- Smaller‑city manufacturing surge: Cities like Panipat, Karur and other non‑metropolitan areas are emerging as hubs of export activity, helping offset tariff pressure in more traditional sectors.
- Tension‑easing signals: New agreements—such as a large LPG deal between India and the U.S.—have helped thaw the cold relationship and created positive trade sentiment.
Areas of concern and caution
While the overall numbers show growth, there are caveats:
- Some sectors remain under pressure. Labour‑intensive goods (textiles, apparel, gems & jewellery) continue to report declines, underscoring that not all exporters are benefiting equally.
- Dependence on one market remains a risk. The U.S. accounted for a large proportion of certain categories, making exporters vulnerable to further policy shifts.
- Tariff relief is not guaranteed. India remains exposed to U.S. policy changes and may still need to make concessions (e.g., lowering its own import tariffs) to secure a stable deal.
What this means for the future
- For Indian exporters: This is a signal to diversify and upgrade: seek high‑value markets, scale up digital channels, shift manufacturing beyond traditional hubs.
- For policymakers: India now has ammunition to negotiate from strength—but must ensure export competitiveness, infrastructure readiness and resilience to shocks.
- For U.S.–India relations: The trade uptick underscores the economic inter‑dependence of the two countries. A constructive bilateral deal could reduce friction, but missteps could reverse the gains.
Final word
India’s ability to post export gains to the U.S. despite punitive tariffs is a testament to its export ecosystem’s agility—and perhaps a nudge that trade tensions are easing. The coming months will test whether this uptick can be sustained and translated into long‑term resilience or whether it’s a temporary reprieve in a larger policy battle.
