New Delhi: Prime Minister Narendra Modi held a crucial meeting with exporters from labour-intensive sectors on Monday to explore ways to enhance the country’s global trade competitiveness, amid steep US tariffs that have created significant problems. The USA has imposed a 50% tariff on dozens of Indian items, leading to a sharp decline in exports and margins. These sectors include textiles, leather, gems and jewellery, handicrafts, engineering, and seafood.
India’s exports to the US, its prime foreign market, fell by 37.5 percent from May to September 2025. Shipments decreased from $8.8 billion in May to $5.5 billion in September, making it one of the quickest declines in many years. Tariffs were first imposed in April 2025 at 10 percent, then raised to 25 percent at the beginning of August, and to 50 percent by the end of August under Trump’s regulations. The most affected categories are smartphones and pharmaceuticals, with the form falling by 58 percent from $2.29 billion in May to $884.6 million. Shipments without duty, which constitute almost a third of all exports, experienced a faster contraction of 47 percent in volume.
This sharp decline in exports has aggravated the country’s trade imbalance, which, driven by a 16.6 percent import growth in September 2025 to $77.32 billion, multiplied the trade deficit to $31.15 billion for the month. However, over the whole April-September 2025 period, the country’s exports grew by only 3.02 percent to $220.12 billion, while imports expanded by 4.53 percent to $375.11 billion, resulting in a six-month deficit of almost $155 billion.
On October 22, the concerned ministries met with the Modi Government to discuss ways to strengthen the country’s global trade position amid these tariff impediments. The session emphasized affected sections critical to the nation’s export industries, including significant labor-intensive sectors. Representatives of this council actively suggested best practices and key areas of adjustment to minimize the effects of these tariffs. In parallel, India and the US, both long-standing allies, are engaged in ongoing trade negotiations to unlock tariff reductions over the next few months.
Indian authorities have strongly condemned such actions, calling the tariff increases unfair and groundless. Especially since increased export duties were imposed only partly in response to continued Indian imports of Russian crude. The Indian Government has declared its inalienable right to ensure its own energy security and the inadmissibility of a burden on the national economy in the context of sharply increased energy prices, yet has taken no counter-tariff measures for the first time.
At present, India accounts for approximately 2 percent of global trade, including 1.6 percent of global goods sales and 3.3 percent of global services sales. The Government is expected to work on improving India’s competitiveness by diversifying its export marketing beyond its persistent reliance on sales in the US, supporting the work of micro, small, and medium enterprises, and boosting trade agreements with other countries to reduce the burden of high tariffs.
To summarize, US tariffs have significantly disrupted Indian exports to its largest buyer and, as a result, have led to a plummet in a majority of its premier sectors. Thus, PM Modi’s meeting with exporters is timely, as its main objective is to ensure that Indian manufacturing builds the resilience to withstand the pressures induced by tariffs and to positively influence global commerce amid ongoing trade pacts that are far from satisfactory renegotiation.