India's trade relationship with the United States faced significant headwinds in October as merchandise exports declined for the second consecutive month, primarily due to hefty tariffs imposed by Washington.
October Trade Figures Show Concerning Trend
According to the latest commerce ministry data, India's exports to the US dropped by 8.58 percent to USD 6.3 billion in October. This decline occurred despite overall growth in the fiscal year's first seven months. Simultaneously, imports from the United States increased by 13.89 percent to USD 4.46 billion during the same month.
The challenging trade environment stems from the sweeping 50 percent tariff on Indian goods that Washington implemented starting August 27. This substantial tariff barrier has made Indian products less competitive in American markets, directly impacting export performance.
Longer-Term Perspective and Trade Negotiations
When examining the broader April-October period of the current fiscal year, the data reveals a more positive overall trend. Exports to the US grew by 10.15 percent to USD 52.11 billion, while imports increased by 9.73 percent to USD 30 billion during this seven-month window.
Commerce Secretary Rajesh Agrawal commented on the resilience shown by Indian exporters, stating: "We have been able to hold our ground" despite the high duties affecting trade flows. This remark highlights the determination of Indian businesses to maintain their market presence despite tariff challenges.
Currently, negotiation teams from both countries are engaged in trade talks in Washington, working toward a bilateral trade agreement that could boost two-way commerce and resolve existing trade disputes.
Contrasting Performance with Other Trading Partners
While trade with the US showed strain, India's export relationship with China demonstrated remarkable strength. Exports to China surged by 42.35 percent to USD 1.62 billion in October alone. During the April-October period of fiscal 2025-26, exports to China grew by 24.77 percent to USD 10.03 billion.
However, imports from China also increased significantly, rising 15.63 percent to USD 11.1 billion in October. For the first seven months of the fiscal year, inbound shipments from China expanded by 11.88 percent to USD 74 billion.
The trade data revealed mixed performance with other key partners. Several countries experienced negative export growth from India during October, including the UAE, the Netherlands, the UK, Germany, Bangladesh, Singapore, Saudi Arabia, South Africa, Nepal, Italy, Australia, France, Belgium, Korea, and Malaysia.
On a positive note, exports to Hong Kong and Spain registered growth during the same period, providing some bright spots in an otherwise challenging export landscape.
The import side showed similar variability, with declining inbound shipments from Russia, Saudi Arabia, Iraq, Korea, Indonesia, and Taiwan, while imports increased from the UAE, Singapore, Japan, Malaysia, the UK, and Thailand.
