Trump's tariffs bite India, exports to US fell by 12 pc in September
US President Donald Trump’s claim that India has agreed to stop buying Russian crude raises hope of a breakthrough in the bilateral trade negotiations
The impact of the 50 per cent tariff imposed by the US is visible with Indian goods exports to America taking a 11.9 per cent hit in September (year-on-year). Indian goods exports to the US in the first half of FY26 (April-September), however, grew at a robust 13.4 per cent.
India’s overall goods exports grew at 6.8 per cent in September and 3 per cent in the first half of this fiscal.
Also read: Trump claims Modi assured him India will stop buying Russian oil
September is the month that saw the full impact of the US tariff – 25 per cent of reciprocal tariffs came into effect on August 7, and a 25 per cent penalty tariff took effect on August 27.
Exports to US down by 12 pc
The Commerce and Industry Ministry’s data, released on Wednesday (October 15), shows Indian goods exports to the US fell from $6.2 billion in September 2024 to $5.5 billion in September 2025.
Since the sector-wise exports to the US have not been released, it is difficult to pinpoint which sectors took the hit to what extent. But it is clear that these are the labour-intensive sectors which are not in the US’s exempted (from tariff) list of items.
Hits and misses
The overall goods exports data for September show the commodities taking the hit include leather and leather products (-6 per cent), cotton yarns/fabrics/handloom parts (-11.7 per cent), man-made yarns/fabrics (-2.3 per cent), readymade garments (-10 per cent), jute products (-12 per cent), carpet (-15 per cent), handicrafts (-18 per cent), plastic and linoleum (-12 per cent).
Also read: Rahul slams PM Modi after Trump’s claim on India stopping Russian oil imports
On the other hand, overall exports (for September) of labour-intensive marine products grew by 23 per cent and gems and jewellery by 0.4 per cent.
The overall exports of electronics saw a massive jump of 50.5 per cent (42 per cent jump in H1 of FY26), while export of engineering goods grew by 2.9 per cent (5.4 per cent in H1 of FY26), drugs and pharmaceuticals by 2.6 per cent (6.5 per cent in H1 of FY26) and petroleum products by 15 per cent (but fell by 16 per cent in H1 of FY26).
Some of these items, like electronics, generic drugs, and petroleum products, are in the US’s exempted list. The US imposed a 100 per cent tariff on generic medicines, not generic ones that account for the bulk of Indian exports, which came into effect from October 1. In all, 45 per cent of Indian goods exports are hit by the US tariff – the rest 45 per cent falling in its exempted list.
Trade deficit at $16.6 billion
Meanwhile, trade deficits went down by $16.6 billion in September, up from $8.6 billion in the corresponding month of 2024.
This is because the goods import went up to $68.5 billion (from $58.7 billion in September 2024) – as against goods exports going up to $36.4 billion – from $34 billion in September 2024.
Also read: India open to more US crude imports, says Commerce Secretary
If the net deficit is lower it is because the services exports generated a surplus of $15.5 billion in September 2025.
Trump’s claims on India’s Russian oil purchase
Meanwhile, in a development that may prove to be a breakthrough moment, US President Donald Trump told reporters on Thursday (India time), at a White House event, that Prime Minister Narendra Modi had assured him that India will stop buying Russian crude.
While India has not categorically denied Trump’s claims, the Ministry of External Affairs on Thursday said that the country’s oil purchases are guided by “consistent priority to safeguard the interests of the Indian consumer in a volatile energy scenario.”
India-US trade deal
An Indian trade negotiation team is already in the US to take the bilateral trade agreement (BTA) forward. India hopes to finalise the dead by December 2025.
Initially, the trade negotiations broke down as India refused to open up agriculture and dairy sectors. But in August, Trump made India’s import of Russian crude a big stumbling block and imposed a penalty tariff of 25 per cent, over and above the reciprocal tariff of 25 per cent (which was on account of India’s high tariff and non-tariff barriers).
Also read: US sanctions 50 including two Indian nationals over Iran energy exports
Over the next few weeks, Russian crude became the focal point and the pivot for the BTA.
India is second to China in importing Russian crude. According to Kpler, a global real-time data and analytics provider, India imported 1.8 million barrels a day during October 1-14 – 35 per cent of India’s total crude import during this fortnight.
