India’s goods exports to the United States its largest foreign market have fallen sharply, dropping 20% in September and nearly 40% over the past four months as President Donald Trump’s steep tariffs took effect, new data shows.
September marked the first full month of Washington’s 50% tariffs on Indian goods, which came into force on 27 August. The tariffs include an additional 25% penalty for New Delhi’s refusal to stop importing oil from Russia.
“US has become India’s most severely affected market since the tariff escalation began,” said Ajay Srivastava of the Global Trade Research Initiative (GTRI), a Delhi-based think tank.
The new levies have hit India’s labour-intensive sectors hardest including textiles, gems and jewellery, engineering goods, and chemicals leading to heavy losses and job worries. Shipments to the US have now declined for four consecutive months, falling 37.5% from $8.8 billion (£6.5bn) in May to $5.5 billion in September.
The export slump has also widened India’s trade deficit the gap between imports and exports to a 13-month high of $32.15 billion in September.
Some of the losses from reduced trade with the US were partially offset by stronger exports to countries such as the United Arab Emirates and China.
Trade negotiations between India and the US resumed last month after months of delay. An Indian delegation is currently in Washington seeking a breakthrough deal, with both sides aiming to conclude an agreement by next month.
On Wednesday, Trump said Indian Prime Minister Narendra Modi had agreed to stop buying Russian oil “within a short period of time,” as part of Washington’s widereffort to cut off Moscow’s wartime funding.
An Indian foreign ministry spokesperson confirmed that discussions with the US were “ongoing,” and that Washington had “shown interest in deepening energy co-operation with India.”
However, significant sticking points remain, particularly over US access to India’s agriculture and dairy sectors long a flashpoint in trade relations. Washington views India’s farm market as a major untapped opportunity, but Delhi has resisted pressure, citing food security, farmer livelihoods, and rural stability.
Until recently, the US was India’s largest trading partner, with bilateral trade reaching $190 billion in 2024. Trump and Modi have publicly set a goal of more than doubling that figure to $500 billion, but with tariffs biting and exports shrinking, that target appears increasingly difficult to reach.
Erizia Rubyjeana
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