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India's exports to the United States fell for the third straight month in August, as steep tariff hikes by Washington continued to weigh on trade, according to a report by the Global Trade Research Initiative (GTRI).
"Exports in August dropped sharply to USD 6.7 billion, marking a 16.3 per cent fall from July. This was the steepest monthly decline of 2025. The fall came after the U.S. doubled duties on Indian goods from 25 per cent to 50 per cent on August 27. Earlier in the month, on August 7, tariffs had already risen from 10 per cent to 25 per cent," the report said. The downward slide began in June. After a 4.8 per cent increase in May that pushed exports to USD 8.8 billion, shipments fell by 5.7 per cent in June to USD 8.3 billion. July saw another dip, slipping 3.6 per cent to USD 8.0 billion. August's plunge deepened the losses, leaving exporters under severe pressure. The GTRI report noted that the escalation of tariffs closely mirrored the decline in exports. Until April, Indian goods entered the U.S. under regular duties. Washington's decision to impose a 10 per cent universal tariff from April 5 initially had little impact, as buyers front-loaded purchases in May. But by June, the new duties began hurting India's competitiveness, and orders shifted to other suppliers. The August hikes, however, dealt the heaviest blow. With tariffs climbing first to 25 per cent and then doubling to 50 per cent in less than three weeks, exporters had little time to adjust. "September is expected to show an even steeper fall, as it will be the first month fully exposed to the 50 per cent rate," the report noted. About one-third of India's exports, including pharmaceuticals and smartphones, remain tariff-free. But labour-intensive sectors such as apparel, gems and jewellery, leather, shrimp, and carpets, for which the U.S. makes up between 30 to 60 per cent of global sales, are facing severe stress. According to GTRI, if the 50 per cent tariff remains in place through the end of FY 2026, India could lose as much as USD 30-35 billion in exports to the U.S. This would be a major setback, given that America accounts for nearly one-fifth of India's total goods exports. The report highlighted that the industry groups are urging the government to respond quickly. Their demands include interest subsidies, faster duty remission under export promotion schemes, and liquidity support to prevent closures. While GST cuts have been rolled out on several domestic products, export-specific relief has not yet been announced. Without swift measures, exporters warn that the prolonged tariff wall may trigger job losses and further weaken India's trade momentum going into 2026. (ANI)
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