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US Tariff May Give India an Edge, but a Quarter of Exports to America Remain Under Pressure
Author
Shoonya Team
India may enjoy a competitive advantage over several rival exporting nations due to the United States’ 10% Section 301 tariff, but nearly a quarter of its shipments to the US continue to face stress.
India’s exports to the US fell 16% to $26.2 billion during March-May 2026 from $31.31 billion in the corresponding period a year ago. The decline came despite a sharp improvement in several tariff-covered product categories, suggesting that gains have been concentrated in select sectors while a significant portion of shipments continues to struggle.
How India’s US Exports Split Across Tariff Categories
Exports that registered growth during the three-month period rose to $15.5 billion from $10.83 billion.
| Category | March-May 2025 | March-May 2026 |
|---|---|---|
| Total exports to the US | $31.31 billion | $26.2 billion |
| Exports registering growth | $10.83 billion | $15.5 billion |
| Growth under Section 232 and exempt categories | $8.63 billion | $12.35 billion |
| Growth under reciprocal tariffs | $2.19 billion | $3.15 billion |
| Decline under reciprocal tariffs | $11.79 billion | $6.28 billion |
Of this, shipments exempt from reciprocal tariffs and covered under Section 232 increased to $12.35 billion from $8.63 billion. Exports covered by the reciprocal tariff also managed to grow, rising to $3.15 billion from $2.19 billion, indicating that Indian exporters expanded shipments in several product lines despite the additional 10% duty.
Where the Losses Are Concentrated
Products facing tariff-related pressure accounted for almost 24% of India’s exports to the US during the period. Exports in these categories fell to $6.28 billion from $11.79 billion a year earlier, a decline of nearly 47%.
Three categories stand out for the steepness of their fall:
- Diamond trade collapsed: India exported $92.19 million worth of diamonds to the US in March-May 2026, compared with $1.26 billion in the same period last year.
- Jewellery exports declined 70% year-on-year.
- Shrimp trade fell 33%.
Which Sectors Gained From the Tariff Advantage
Among the biggest gainers were niche engineering, textile, and electronics products. Several categories recorded multi-fold increases from a year ago, albeit from relatively small bases:
- Optical fibres surged from $98,194 to $8.8 million.
- Seamless steel casing pipes used in oil and gas drilling jumped from $26,400 to $2.69 million.
- Domestic coffee and tea makers, footwear components, welding machinery parts, and electrical equipment also posted sharp increases.
Final Outlook
While the uniform 10% rate may improve India’s relative competitiveness against countries facing steeper duties, the benefits have not spread across all categories. The gains visible in engineering and electronics stand against steep declines in high-value segments such as diamonds and jewellery, which were among India’s largest export earners to the US.
Source: MoneyControl
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