India's goods exports to US drop to 9-month low in Aug as tariffs bite
This story was originally published at 19:32 IST on 15 September 2025
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NEW DELHI – India's merchandise exports to the US in August slumped to a multi-quarter low as Washington's steep tariffs on Indian goods took effect in the first week of the month. According to data released by the commerce ministry on Monday, Indian exports to the US fell 14.3% on month to $6.87 billion last month, the lowest value since November. On a year-on-year basis, exports to the US were up 7.2% in August, the slowest on-year growth since November.
In November, India had exported goods worth $5.71 billion to the US, down 2.6% on year and 17.5% on month.
The data for August assumes importance as it was the first month that India experienced US President Donald Trump's 25% reciprocal tariff that took effect from Aug. 7 while also experiencing a few days of the 25% punitive tariff at the end of the month. Citing displeasure over the high trade gap, the US has imposed 25% reciprocal tariffs on India, with an additional 25% as punitive tariff for economic ties with Russia, which took effect on Aug. 27.
Despite the steep tariff on Indian goods, the US' trade gap with India widened to $18.78 billion during Apr-Aug from $14.30 billion during the same period last year. Given the fall in exports in August, the trade gap narrowed on a month on month basis.
The US is India's top export destination, accounting for nearly 20% of India's total exports. In 2024-25 (Apr-Mar), India exported goods worth $86.51 billion to the US and had a trade surplus of $40.82 billion. Higher tariffs by the US on India result in a pricing disadvantage of 30–35% for Indian exports, making them less competitive than those from China, Vietnam, Cambodia, the Philippines, and other Southeast and South Asian countries.
New Delhi was hoping for the proposed bilateral trade agreement to work as an insulation against Washington's tariffs, but the two countries are yet to iron out differences over the US' demand to gain access to India's politically and socially sensitive farm and dairy sector. India has always been protective about its farm and dairy sector, but the US wants to push genetically modified crops and dairy products into India under the deal. New Delhi is unwilling to yield to these demands. If the 50% tariff continues, it could hurt India's growth by nearly half a percentage point.
Chief negotiators from both the nations will hold a one-day meeting on Tuesday in the national capital to discuss the proposed trade deal. Special Secretary in the commerce ministry Rajesh Agrawal is India's chief negotiator and Brendan Lynch, assistant US Trade Representative for South and Central Asia, will lead the negotiation on behalf of the US.
Tuesday's meeting is crucial, especially given that in the recent past, US President Donald Trump, Prime Minister Narendra Modi, and Commerce and Trade Minister Piyush Goyal have all voiced optimism about the intent to close the deal at the earliest. End
US$1 = INR 88.21
Reported by Priyasmita Dutta
Edited by Avishek Dutta
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