As Volume of Indian Goods to US plunge, American Consumers start feeling the burnt
India’s goods exports to the US, its largest foreign market, dropped sharply by 20% in September and nearly 40% in the last four months, after Trump’s unilateral irrational tariffs ordered by Trump took effect.
Trump Bhai’s 50% tariffs on Indian goods, kicked in on 27 August. This includes a 25% penalty for Delhi’s outright refusal to listen to his dictats to stop buying oil from Russia. This was like a tight public slap on Trump’s face.
The US has certainly become India’s most severely affected market since the tariff warfare began but it is the American consumer who are facing the burnt and paying the price of Trump’s irrational behavior.
Though Negotiations for a trade deal between the two governments have not been called off and are still under way, with the goal of concluding an agreement by next month.
The impact of the tariffs has for the time being felt by labour-heavy sectors such as textiles, gems and jewellery, engineering goods, and chemicals, which have seen slowdown to exports to USA.
Shipments to the US have seen four consecutive months of decline, and are down 37.5% – from INR 7.65 Kharab ( USD 8.8bn) in May to INR 4.8 Kharab (USD 5.5bn) in September.
The drop in exports have certainly increased India’s overall trade deficit (the gap between what a country imports and exports), which widened to a 13-month high of INR 27.9 Kharab in September. Most of the deficit is because of planned import of huge quantities of Russian oil at discounted price.
However the above does not really affect India overall. A big part of the reduction in exports to the US has already been taken care by improved trade with countries like the UAE, China, Australia, ASEAN, Japan and UK.
Trade with Russia and Brazil have started picking up and improving day by day with other BRICS countries. The India China trade is likely to see a huge rally in coming months.
Trade negotiations between India and the US resumed last month after months of stalling over a number of differences. An American delegation had visited India in September and now an Indian delegation is currently in the US for talks.
A spokesperson of the Indian foreign ministry said discussions were “ongoing” with the US administration which had “shown interest in deepening energy co-operation with India”.
But major sticking points over trade still remain, including access to Indian agriculture and dairy sectors which is just not feasible and a RED LINE has been drawn by India.
For years, Washington has pushed for greater access to India’s farm sector, seeing it as a major untapped market. But India has fiercely protected it, citing food security, livelihoods and the interests of millions of small farmers.
Until recently, the US was India’s largest trading partner, with total bilateral trade reaching INR 114.8 Kharab ( USD 132 bn ) in 2024-25.PM Modi had set a new target to more than double this figure to INR 435 Kharab ($500bn) by 2030.
Trump Bhai has further shot himself on his foot On Wednesday, by uttering an outright lie that Prime Minister Narendra Modi has “agreed to stop buying Russian oil”.
Through his antics the US seeks to put” economic pressure” on the Kremlin as part of efforts to keep Zelenskey chair intact. However Russian economy is surging ahead day by day and Ukraine is hurtling towards Stone age.
