Steep US Tariffs Trigger 9% Drop in India's October Exports
India's merchandise exports to the United States witnessed a sharp decline of 9% in October 2025, compounding a 12% drop from the previous month. This continued downturn is directly attributed to the 50% tariffs imposed by the US, which are the highest globally and have severely impacted the competitiveness of Indian goods.
Government Rolls Out Major Support Package
In response to the steep decline, the Union Cabinet has approved the Export Promotion Mission (EPM) with a substantial outlay of Rs 25,060 crore. This initiative, announced in the Budget, is designed to help Indian exporters sustain their international orders. Furthermore, the government has extended additional credit facilities of up to Rs 20,000 crore to provide much-needed liquidity.
The Reserve Bank of India (RBI) has also stepped in with significant relief measures. It announced a four-month moratorium on loans and interest payments for affected exporters, effective from September 1 to December 31, 2025. The central bank also extended export credit tenors to 450 days and relaxed asset classification norms to ease the financial burden on exporters.
Regulatory Reforms to Boost Competitiveness
Recognizing the need to reduce compliance burdens, several ministries have begun revoking Quality Control Orders (QCOs) that were particularly hurting Medium and Small Enterprises (MSMEs). In a significant move, 14 QCOs on chemical intermediaries used in the textile value chain and 7 QCOs on key industrial inputs like copper and aluminium were rolled back in just the last week.
Commerce Secretary Rajesh Agarwal stated that Indian exporters have managed to hold on to the US market despite the challenges. He expressed optimism that exports in November would show improvement following the approval of the EPM and other manufacturing boost measures.
India-US Trade Deal on the Horizon
There are positive signs of a resolution as both nations work towards a trade agreement. Government officials confirmed that India has sent its final proposal to the US and is awaiting a response from Washington.
US President Donald Trump recently indicated that a deal is close, stating, "We will bring the tariffs down at some point." He acknowledged that the high tariffs were linked to India's previous imports of Russian oil, which have since been curtailed. This potential deal gains importance as the US has already signed an agreement with China, lowering tariffs to 47%.
Commerce Secretary Agarwal added, "The part of the agreement that needs to be addressed, that is the reciprocal tariffs, hopefully will be addressed soon. There is no deadline at this point. Both countries remained in touch." The commerce ministry data revealed that India's exports to the US slipped to $6.3 billion in October 2025, down from $6.9 billion in the same month last year.
