India’s Exports to the United States Rise Sharply Despite High Tariffs as Trade Relations Improve

India’s exports to the United States increased in October for the first time in five months, rising by fourteen point five percent from September despite steep fifty percent tariffs imposed by Washington. The rebound comes at a time when overall Indian exports have declined, suggesting that easing trade tensions between the two countries may already be influencing market behaviour.

Exports to the United States had dropped sharply after the tariff hike took effect on August twenty seven. The new duties included an additional twenty five percent penalty on India for continuing to import Russian oil. The latest data however shows that the negative impact may be moderating. Indian officials said that trade negotiations with the United States are progressing well and that key elements of a new deal are close to being finalised.

One factor behind the improvement is a new agreement involving India’s state run oil companies, which will now source a larger share of liquified petroleum gas from the United States. At the same time President Donald Trump’s administration has exempted many Indian agricultural products from reciprocal tariffs, easing pressure on exporters.

Despite the positive news India’s overall export picture remains challenging. Total goods exports in October were down eleven point eight percent compared with the previous year, and fifteen of India’s top twenty export destinations saw a decline in bilateral trade. Ajay Srivastava from the Global Trade Research Initiative said that tariff free sectors such as smartphones and pharmaceuticals may have performed better but noted that this is still only an early assumption. He added that even with the October rise India’s exports to the United States have fallen almost twenty eight percent between May and October, reducing monthly revenue by more than two point five billion dollars.

Trade relations between the two countries have been strained for months, largely because of India’s continued reliance on Russian crude oil. India became one of the largest buyers of Russian oil after Western sanctions were imposed on Moscow in 2022. Last year India purchased more than fifty two billion dollars worth of Russian crude. President Trump has repeatedly said that India agreed to reduce these purchases although Indian officials have not publicly confirmed this.

New Delhi is now trying to balance its long standing energy ties with Moscow and its growing trade relationship with Washington. Russian President Vladimir Putin is expected to visit Delhi soon for talks on new agreements, complicating the diplomatic landscape.

Nevertheless both sides say progress is being made. A senior Indian official told The Hindu newspaper that the first phase of a long pending trade deal is now close to completion. India also stands to gain from the United States decision to roll back duties on products such as tea, coffee and spices, effectively making around one billion dollars worth of Indian agricultural exports exempt from tariffs.