Editor’s Note
Recent trade data reveals the tangible effects of U.S. tariffs, with India’s exports to America declining sharply in September. However, this has been partially offset by increased shipments to other markets, highlighting shifting global trade dynamics.
The impact of the 50 percent tariff imposed by US President Donald Trump on India is beginning to show. India’s exports to the United States declined in September. Meanwhile, exports to countries other than the US have increased.
According to a report by CRISIL, India’s exports to the US fell by 11.9 percent in September. It has now decreased to $5.5 billion.
Exports had increased by 7 percent in August.
According to the report, India’s exports to the US had increased by 7 percent in August but fell in September.
Experts say the real impact of the tariffs will be visible in the next few more months, as exporters had booked shipments before the tariff hike. If this had not happened, the decline figure could have been even higher.
It is noteworthy that September is the first full month during which the tariffs have been in effect.
Increase in Exports to UAE and China
Meanwhile, exports to non-US markets increased by 10.9 percent in September. This increase was 6.6 percent in August.
Due to this, India’s total exports registered a growth of 6.74 percent. The highest growth was seen in exports to the United Arab Emirates (UAE) and China. Exports to the UAE increased by 24.33 percent and to China by 34.18 percent. However, imports from these two countries have also increased.
Trade Deficit Reaches Highest Level in About a Year
According to data released by the Ministry of Commerce and Industry, the trade deficit has widened to $31.15 billion due to a surge in imports of gold, silver, and fertilizers. This is the largest trade deficit in nearly a year.
India’s total imports increased by 16.6 percent to $68.53 billion. In September a year ago, it was $58.74 billion. The record prices of metals like gold and silver are considered the biggest reason behind the increase in imports.
US Imposes 50 Percent Tariff on India
The US imposed a 25 percent tariff on India on August 7. Subsequently, due to oil purchases from Russia, an additional 25 percent tariff was imposed from August 27. That is, a total of 50 percent tariff is applicable on India.
Trump had said that by buying oil from Russia, India is funding the Ukraine war. India says it will make its trade decisions keeping national interests in view.