US exports could decline further as September marks first month of full 50% tariffs: GTRI

New Delhi [India], September 22 (ANI): India's exports to the United States are showing signs of further decline as September marks the first full month under 50 per cent tariffs on key products, according to a report by GTRI.

The report noted that August data only partly reflected the impact of higher tariffs, as India paid 10 per cent tariffs until August 6, 25 per cent until August 27, and 50 per cent only after August 28.

With September being the first complete month where all Category C exports face 50 per cent tariffs, sectors such as textiles, gems and jewellery, shrimp, chemicals, and solar panels could see a deeper fall.

It stated "September will be the first full month where all Category C exports face 50 per cent tariffs, meaning the declines in textiles, gems and jewellery, shrimp, chemicals, and solar panels could deepen further".

Exports to the U.S. have now fallen for a third consecutive month, a result largely anticipated due to steep tariff increases. More concerning, however, is the unexpected decline in tariff-free exports such as smartphones and pharmaceuticals.

These products, which are crucial to India's flagship production-linked incentive (PLI) programme, have seen sharp contractions, threatening to derail recent policy successes.

The GTRI report highlighted that Category C exports, which account for 62.7 per cent of India's shipments to the U.S., have faced the steepest tariff disadvantages. Exports in this category fell 10.8 per cent, from USD 4.82 billion in May to USD 4.30 billion in August 2025.

The decline has been concentrated in labour-intensive sectors that are highly exposed to price competition.
Meanwhile, tariff-free products, which formed 28.5 per cent of India's August exports, saw an even sharper contraction of 41.9 per cent, dropping from USD 3.37 billion in May to USD 1.96 billion in August.

The steep decline is attributed to frontloading by companies attempting to avoid higher tariffs, the report said.
Industry bodies are urging the Indian government to act quickly, seeking support in the form of interest subsidies under the interest equalisation scheme, faster duty remission, and liquidity support.

While GST rate cuts have been implemented to boost domestic consumption, export-specific relief measures are still lacking.
On the trade negotiation front, India is expected to firmly protect its key interests in agriculture, dairy, GM feed, and regulatory sovereignty, as U.S. demands are likely to continue rising. (ANI)