India’s tariff-free exports to the United States have witnessed a significant decline in recent months, prompting concerns from the Congress party. Between May and August 2025, exports in key sectors such as pharmaceuticals and smartphones fell sharply, dropping from $3.37 billion to $1.96 billion—a decrease of nearly 42%.
Smartphone exports, despite being exempt from U.S. tariffs, saw a steep 58% fall, from $2.29 billion to $964.8 million. Pharmaceutical exports also experienced a decline of 13.3% during the same period.
Congress leader Jairam Ramesh has emphasized that this drop is “certainly not a seasonal fall,” highlighting the need to investigate potential structural or policy-related issues affecting these exports.
Experts at the Global Trade Research Initiative (GTRI) have described this development as alarming, especially since it involves products not subjected to tariffs. They have called for a detailed examination to identify the reasons behind the sudden downturn.
The situation comes amid broader challenges in India-US trade relations, including the U.S. imposing a 50% tariff on certain Indian goods. Industry leaders suggest that this trend should encourage India to reassess and strengthen its global trade strategies, diversify export markets, and improve economic resilience.
Chief Economic Advisor V. Anantha Nageswaran has expressed optimism regarding the resolution of penal tariffs imposed during the Trump administration, indicating that a compromise to a 15% tariff rate could be reached within 8 to 10 weeks.
This sharp decline in exports underscores the importance of reviewing India’s trade policies to adapt to evolving global market dynamics.
