Syllabus: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Context and Overview
- India’s exports showed resilience in late 2025 despite rising U.S. tariffs.
- Overall exports grew, and shipments to the U.S. rebounded, masking sectoral stress.
- Analysis compares September–November 2025 data with 2023–24 monthly averages.
- Focus is on sectors with high export dependence on the U.S. market.
Sectors Unaffected or Benefiting
- Telecom instruments, mainly smartphones, surged 237% due to tariff exemption.
- Electrical machinery exports to the U.S. increased by 15%.
- Growth in these items offset tariff-induced declines elsewhere.
Sectors Hit by U.S. Tariffs
- Pearls and precious stones exports fell sharply by 78.5%.
- Gold jewellery declined by 39%, cotton fabrics by 23%.
- Marine products dropped 17% in U.S. shipments.
- Readymade cotton garments declined marginally by 4.6%.
Two-Path Adjustment Strategy
- Path 1: Absorbing Tariff Impact
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- Some exporters partially absorbed tariff shocks without major market shifts.
- U.S. remained a dominant buyer in several sectors despite reduced volumes.
- Path 2: Market Diversification
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- Marine exports grew 17% overall, despite U.S. decline.
- Exports to China increased 23%, strengthening existing partnerships.
- Entry into new European markets filled U.S. demand gaps.
- Marine exports exceeded $50 million to Spain in three months.
- Shipments rose to Belgium (124%), Netherlands (56%), Germany (65%), and Italy (23%).
Sectoral Feedback and Enablers
- Seafood Exporters Association of India urged new Free Trade Agreements.
- Cotton exporters highlighted rupee depreciation aiding market discovery.
- Cotton Textiles Export Promotion Council noted currency advantage in diversification.
Conclusion
- India offset U.S. tariff losses through old alliances and new markets.
- Export diversification emerged as a key buffer against trade shocks.
