ANALYSIS Smartphones may be powering a surprise jump in India’s exports to the US 

India’s exports to the US last month saw their first monthly increase since May, even with the 50 percent tariff in place.

India’s merchandise exports may have slipped to an 11-month low in October 2025, but the American market offered a rare bright spot.

Sequentially, shipments to the United States rose 15.4 percent last month, despite a steep 50 percent reciprocal duties, a jump likely powered by Indian smartphones, which sit in the tariff-exempt category.

India's overall merchandise exports for October 2025 stood at $34.38 billion, down nearly 12 percent year-on-year (YoY), while goods imports rose to $76.06 billion, up almost 17 percent over the same period.

Though product-wise data for the US market during October are not yet available, the improved sequential performance may just be driven by stronger growth in the tariff-exempt sector of electronic goods, which mostly comprises smartphones.

A closer look at the sectoral data for October 2025 shows that exports of tariff-free electronic goods, largely smartphones and the second-largest product category supplied to the US, recorded a 31 percent rise in October over the previous month, with the YoY growth slightly above 19 percent.

The sequential rise was driven by a $967.5 million increase in October over the previous month, accounting for nearly the entire addition in India’s overall exports to the US during this period.

This month-on-month rise in exports of electronic goods in October is significantly higher, compared to the 6.47 percent growth recorded in September over August.

Global Trade Research Initiatives’ Ajay Srivastava says with product-wise US data for October yet to be released, the improvement may well be driven by tariff-exempt sectors like smartphones and pharmaceuticals, a view that remains tentative.

He noted that India’s exports to the US last month saw their first monthly increase since May, even with the 50 percent tariff in place.

To be sure, exports to India’s largest trading partner were still down nearly 9 percent YoY at $6.3 billion, though the contraction was milder than the almost 12 percent decline seen in September.

Most other major export categories to the US saw steep declines in overall shipments, including tariff-free sectors.

Engineering goods exports, India’s top shipment to the United States, fell 16.7 percent YoY to $9.37 billion in October 2025, while, month-on-month, the decline stood at 7.3 percent.

Though mostly in the exempted category under reciprocal tariffs, India’s drugs and pharmaceutical exports contracted over 12 percent in October on a sequential basis and more than 5 percent YoY.

The sequential contraction for this sector is slightly higher than the 4.4 percent decline recorded in September. To be sure, it is yet to be ascertained whether the drop was driven by reduced shipments to the US market or to other destinations.

During October 2025, exports of Indian textiles registered a degrowth of 12.9 percent YoY, while apparel shipments also contracted by a similar margin in the same period.

This sector remains among the worst-hit by steep US tariffs, with ready-made garments being the fifth-largest item shipped to American shores in FY25.

However, shipments of ready-made garments of all textiles rose 7.2 percent sequentially in October 2025, possibly reflecting some diversification or stronger exports to the US despite the tariffs.

Then again, even though exempt from US’s reciprocal tariffs, India’s overall exports of petroleum products fell 20 percent sequentially in October, with a smaller YoY decline of 10.5 percent.

Another top export item to the US, overall shipments of gems and jewellery saw an almost 30 percent decline in October YoY, while the sequential fall was relatively smaller but still elevated at nearly 20 percent.

As per government estimates, Indian exports worth roughly $48.2 billion are facing elevated US tariffs of 50 percent, effective from August 27.

India exported goods worth $86.51 billion to the US in FY25, with the top five categories accounting for nearly $60 billion of those shipments.