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Growth in India’s goods exports, which had slowed well before US tariffs went up (grew just 1.3% annually over 2023-25), picked up to 3% YoY over Sep-Dec 2025, despite 50% US tariffs. Much of this is due to electronics, but a sector-geography breakdown shows expected and encouraging trends. Exempt sectors (e.g., electronics, petrochemicals) or those with tariffs that are the same for all countries (e.g., steel) have grown. Commodity-like exports (e.g., shrimp) have seen trade diversification. India’s manufactured exports at US$334 Bn (76% of total) have now surpassed their 2022-peak, and a growing FTA footprint should help. There is also a visible recovery in exports of commodities.
India’s goods exports are recovering from a 3-year weakness despite US tariffs
India’s exports had slowed well before the rise in US tariffs, which rose to 10-25% Apr-Aug-2025 and 50% after Sep-2025. Goods export growth FY23-25 slowed to an annualized rate of 1.3% as petrochemicals, ores/minerals, and some labour-intensive manufactured goods (textiles & apparel, gems & jewellery, plastics, leather, handicrafts) fell (Fig 5). This was offset by electronics (3Y CAGR: 35%), agri, chemicals/pharma and ceramic/stone products. These sectoral trends persisted in 2025 despite US tariffs. Growth picked up in Sep-Dec-2025 to 3% YoY: electronics is still strong, and commodities have rebounded.
Sectoral impact of US tariffs: pockets of resilience amidst expected weakness
Sectoral impact of 50% US tariffs appears to be in line with expectations: over Sep-Nov 2025 (Dec details not available yet), exports to the US of non-exempt categories fell (gems & jewellery, leather, plastics, paper and ceramic/stones), dragging down overall sectoral exports YoY. Sectors currently exempt from US tariffs, like electronics, office equipment (likely data centre investments), ores & minerals, petrochemicals and optical/medical instruments continued to grow, with rising US share (‘Propellants’). Exports of agri & allied products, metals and chemicals posted YoY growth despite a declining US share (‘Resistants’), likely due to market diversification (e.g. shrimps), tariffs being the same for all countries under Section 232 (e.g. steel), or exemptions (e.g. pharma). Commodities, or near-perfect substitutes, tend to flow around trade barriers more easily.
Manufactures to benefit from new FTAs
India’s FY26 exports (annualized) remain near FY22 levels, but manufactured exports surpassed their 2022-peak in 2025 despite the US tariff shock. Going forward, while electronics exports should continue to expand, a growing FTA network, such as with the EU, should support other manufactured exports. We expect India’s tariff differential to fall once the US Supreme Court rules against IEEPA tariffs.
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