August 19, 2025

NEW DELHI: What’s causing a surprising boom in India’s exports to the US? Blame it on Donald Trump’s back-and-forth tariffs! Indian exporters hurried their shipments twice—once in April, when the US announced reciprocal tariffs, and again now—to beat higher duties. This frenzy has made goods exports to the US shoot up by a whopping 21% to $33.5 billion from April to July, while India's total exports grew only by 3%, reaching $149.2 billion, according to the latest commerce department data. This sharp rise means Indian exporters have grabbed more space, even though nearly 22% of India's export shipments go to the US. This also means they could get hit hard if the 50% tariff Trump hinted at kicks in. Meanwhile, some exporters are handing out discounts to keep their US buyers happy if the 25% tariff, already announced and starting August 27, takes effect. Sudhir Sekhri, chairman of the Apparel Export Promotion Council (AEPC), shared, "We have spent the last week talking to buyers and in case of old buyers we are looking at some additional discount to retain the business even if it means that we have to pay out of our pockets for sometime." He also hopes for some progress as official US-India talks, delayed from August 25, may happen soon. On the impact of the current 25% tariff, exporters have managed to share the cost and are rushing orders to beat deadlines. Some new contracts even state that offered discounts won't apply if the next 25% tariff linked to India's Russian oil imports does not come into force. However, experts are worried about sustaining business if tariffs jump to 50%. "We operate on a very thin margin of 5-7%, where is the question of offering steep discounts to offset the impact of 25% additional duty? We can sacrifice our profits but can't sustain the business with losses," said Rajendra Kumar Jalan, chairman of the Council for Leather Exports. He sees hope in the ongoing US-Russia talks possibly stopping the new tariffs. RC Ralhan, president of the Federation of Indian Export Organisations (FIEO), has called a meeting of export councils to plan a joint petition for government help. He warned, "There will be significant job losses if export orders are cancelled, especially in the MSME sector." July’s export numbers gave more reason to cheer. Sectors like gems and jewellery jumped 28%, pharma grew 14%, engineering goods shot up 13.8%, and plastics increased 4.4%, all showing better growth than earlier months. Ajay Sahay, FIEO director general, said, "The US market has been expanding and Indian exporters have also focused on it as returns are good." However, Sekhri cautioned, "Everybody was trying to frontload shipments. Order book was good in April-May, business generally looking up because of China+1. The sudden brakes will result in deceleration." So, the next few weeks are crucial as exporters and officials watch US-India trade talks closely to avoid a storm in the export sea.

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Tags: India exports, Us tariffs, Donald trump, Trade talks, Export growth, Tariff impact,