India’s resilient domestic economy and smaller-than-expected export declines are giving New Delhi leverage in its ongoing trade negotiations with Washington, despite steep US tariffs of up to 50% on Indian imports, according to a report.
Exports to the US fell 8.6% year-on-year to $6.3 billion in October, easing from a sharper 12% drop in September — both months reflecting the impact of the 50% tariff. The relatively modest decline has helped Indian negotiators maintain a steady hand.
“For now, we’ve avoided the worst impact of the 50% US tariffs,” a senior government official said. While textile exports have seen a dip in orders, the broader economic fallout remains limited, the official said, allowing room for a more calibrated approach to the talks.
India has resisted rushing into a deal, even as countries like Japan and South Korea have struck tariff agreements with the US, according to the report.
Officials familiar with the negotiations expect the US to eventually scale back the 25% tariff linked to Russian oil purchases and move toward a 15% overall rate. In return, India is willing to lower tariffs on over 80% of goods, while keeping protections for sensitive sectors such as agriculture.
Exporters, meanwhile, are adapting. Firms have diversified into African and European markets and retained US clients by offering discounts and extended delivery timelines. Apparel and footwear businesses are reportedly absorbing cost burdens of up to 20%, Director general of the Federation of Indian Export Organisations Ajay Sahai said.
Trade data from April to October 2025 confirms enduring trends: the US remains India’s top export destination at $52.12 billion, driven by strong demand for engineering goods, pharmaceuticals, electronics, and gems and jewellery. The UAE, Netherlands, and China followed, with exports worth $22.14 billion, $11.98 billion, and $10.03 billion respectively.
China, meanwhile, continues to be India’s biggest source of imports, underscoring the country’s ongoing reliance on critical global supply chains.