India’s exports to the United States have rebounded sharply despite facing some of Washington’s steepest tariffs, offering New Delhi a boost in confidence as trade negotiations continue, though economists warn the headline figures may mask underlying vulnerabilities. According to data cited by Nikkei, India’s shipments to the U.S. rose more than 22% year on year in November, recovering strongly after hitting a low point in September, the first full month after punitive tariffs took effect.
Ministry of Commerce and Industry figures show exports to the U.S. fell to $5.47 billion in September, before climbing to $6.31 billion in October and $6.98 billion in November. While October exports were still down 9% on a year-on-year basis, November’s growth outpaced India’s overall goods export expansion of 19%, suggesting a notable turnaround in bilateral trade flows.
Analysts say the rebound has been driven largely by products that are either exempt from tariffs or less heavily affected. Ajay Srivastava, founder of the Global Trade Research Initiative, told Nikkei that categories such as smartphones, pharmaceuticals and petroleum products likely underpinned the recovery. These sectors have provided resilience at a time when many labor-intensive industries remain under pressure from U.S. levies that now total 50%.
However, Srivastava cautioned that the impressive growth rate partly reflects a weak comparison base. In November last year, India’s exports to the U.S. had fallen to $5.7 billion, well below the $6.2 billion to $7.7 billion range seen in most other months. As a result, the year-on-year surge may exaggerate the true strength of the recovery.
Economists have also pointed to the possibility that exporters rushed shipments ahead of the full impact of tariffs. N. R. Bhanumurthy, director of the Madras School of Economics, noted that exporters may have frontloaded deliveries or delayed the reporting of foreign exchange earnings, which can be held for up to three months, creating a temporary boost in the data.
Currency movements have added another layer of complexity. The Indian rupee has weakened significantly, hovering near 90 per dollar compared with 85.64 at the start of the year. This depreciation has made Indian goods cheaper in dollar terms, encouraging exports ahead of tariff-related cost increases. But Bhanumurthy warned that the advantage may be short-lived, as higher import costs feed into production expenses and erode competitiveness over time.
Beyond the U.S. market, India has also seen growing diversification in its export destinations. Shipments to China jumped 90% year on year in November to $2.2 billion, while overall goods exports for the month reached their highest level in a decade. India has finalized trade agreements with countries including New Zealand, Oman and the United Kingdom in 2025, moves that could help cushion the impact of U.S. trade barriers in the longer term.
Trade ties with Washington, however, remain central. India and the U.S. are negotiating a broader trade agreement even as they grapple with the fallout from tariffs imposed by U.S. President Donald Trump. Washington introduced a 25% tariff on Indian goods on Aug. 7, followed by an additional 25% levy later that month as a penalty for India’s purchases of Russian oil, straining bilateral relations and delaying progress toward an initial deal once expected by the fall.
Indian Commerce Secretary Rajesh Agrawal said on Dec. 15 that the two sides were close to agreeing on at least a framework, though he declined to set a timeline. Analysts say India’s recent export performance could strengthen its hand, but only if U.S. consumers begin to feel the price impact of tariffs, something that has yet to materialize.
With India having already reduced its imports of Russian oil, Bhanumurthy said New Delhi could push for the removal of the additional 25% penalty. Srivastava told Nikkei that while the export data strengthens India’s case for seeking early relief, negotiators should proceed carefully, prioritizing the rollback of the Russia-linked tariff before committing to a broader agreement. Such a move, he argued, would ease pressure on labor-intensive sectors like textiles, leather, and gems and jewelry, and help place talks with Washington on a more balanced footing.
