ANALYSIS Trump tariffs dented India’s labour-intensive exports in September, but marine shipment defied odds

Indian exports were able to offset some losses by boosting exports to more markets, albeit incrementally. This given that on a year-on-year basis, outbound shipments of goods rose 6.7 percent in September.

India’s trade data for September 2025 became the first full-month highlighting the impact of steeper tariff on Indian exports imposed by US President Trump, as shipment to largest exporter United States fell by 21 percent to $5.43 billion from $6.87 billion in August.

Yet, India’s merchandise export managed to grow by 3.6 percent to $36.38 billion in September from $35.10 billion in August. However, this was significantly lower compared to India’s import that jumped 11.3 percent in August to $68.53 billion, widening the trade deficit to a 13-month high of $32.15 billion.

Labour-intensive goods bore the brunt of Trump’s 50 percent tariff, with export growth of gems and jewellery moderating to 0.40 percent on-year at $2.8 billion in September versus 15.6 percent in August.

In September, outbound shipment of textiles and apparels contracted by over 10 percent on-year to $1.6 billion and $997.5 million, respectively, a sharper decline compared to August, when the drop was less than 3 percent for both categories.

Overall shipments of engineering goods - India’s top export to the US – saw a moderation in growth to 2.9 percent on-year at $10.1 billion in September versus a rise of nearly 5 percent in August.

At $2.4 billion, outbound shipments of organic and inorganic chemicals saw its year-on-year growth slowing to 1.8 percent last month versus 3.8 percent in August. This is the sixth-largest export item to the US, according to 2024-25 trade data.

Surprisingly, marine products - expected to be hit the hardest owing to steeper tariffs - defied the odds and registered a growth of 23.4 percent on-year in September at $781.02 million, significantly higher than of 7.9 percent increase in August.

Garima Kapoor, Chief Economist, Elara Capital attributed the rise in shipment of marine products despite steeper US tariffs to ‘robust diversification of export destinations’.

Unsurprisingly, exports of electronic goods - unaffected by Trump’s steeper tariffs – saw a massive 50.5 percent growth on-year at $3.1 billion in September, nearly double the growth seen in August.

However, growth in exports of drugs and pharmaceuticals slowed to 2.6 percent on-year in September, down from 6.9 percent in August, likely due to concerns that Trump may expand the scope of pharma tariffs on branded and patented imports to include generic categories.

Despite the challenges, Indian exports were able to offset some losses by boosting exports to more markets, albeit incrementally. On a year-on-year basis, India’s outbound shipment of goods rose 6.7 percent in September 2025.

Garima Kapoor added that diversification of exports has helped limit the impact of Trump’s tariffs.

“Exports to Spain, the UAE, China, and Bangladesh have registered steady sequential gains, signaling a partial redirection of trade channels amid tariff-induced disruptions,” the Elara economist said.

Indian exports to UAE (24.33 percent), Spain (150.81 percent), China (34.18 percent), Bangladesh (23.06 percent) and Egypt (67.29 percent) saw a significant increase in September 2025 versus the same month last year.