No Major Impact of US Tariff on Indian Exports Despite Trade Deficit Surge
India's trade deficit in September reached a 13-month high, largely due to a significant rise in gold and silver imports and a decline in exports to the United States, following the imposition of high tariffs by the US government.
The Ministry of Commerce stated that while certain products will see minimal tariff impact, the overall trade scenario is being closely evaluated. The 50% tariff imposed by the US (referred to as the Trump Tariff) is starting to show effects, with data released on Wednesday highlighting these trends.
September 2025 Trade Figures
India's merchandise exports grew by 6.7% year-on-year to reach $36.38 billion in September, despite the US tariff. Imports, however, surged by 16.7% to $68.53 billion, pushing the trade deficit to $32.15 billion — the highest in over a year.
In comparison, September 2024's trade deficit was $24.65 billion. Meanwhile, service exports dipped by 5.5% to $30.82 billion, and service imports fell by 7.6% to $15.3 billion, leading to a $15.5 billion surplus. The services data, however, is provisional and will be revised based on RBI figures.
Insights from GTRI Report
Ajay Srivastava of the Delhi-based think tank Global Trade Research Initiative (GTRI) stated, “Since the tariff hike began, the US has become the most affected market for Indian goods.”
Data shows that following the implementation of high tariffs, India’s exports to the US fell by 20% in September and nearly 40% over the past four months. Notably, September was the first full month under the new 50% tariff structure, which came into effect on August 27. This includes a 25% penalty for India’s refusal to halt oil purchases from Russia.
Spike in Gold and Silver Imports
September saw a 107% surge in gold imports, reaching $9.6 billion, while silver imports rose by 139% to $1.3 billion. Fertilizer imports grew by 202% to $2.36 billion, and electronics imports increased by 15% to $9.82 billion.
Commerce Secretary Rajesh Agarwal noted that while gold imports rose sharply in September, the cumulative imports for April–September were actually down by 8.7% year-on-year. He suggested the rise could be attributed to the festive season.
US Tariff Coverage and Future Outlook
Since the US imposed a total 50% tariff on Indian goods from August 27, the full impact was observed in September. Secretary Agarwal emphasized the need to analyze product-level data, stating that around 45% of India’s exports to the US are outside the scope of the 50% tariff. Therefore, the effect on these products would differ.