Indian Exports To The US May Drop By 30 pc in FY26
While India has been charged with a 25 per cent tariff and threatened with an additional penalty, Asian peers have tariffs between 15 to 20 per cent. Inclusion of pharmaceuticals and energy products in the list of goods with tariffs, will also affect India’s exports
Chennai: India’s goods exports to the US may come down by 30 per cent to $60.6 billion in FY26. India’s merchandise export performance is also projected to contract by 4 per cent in FY26.
While India has been charged with a 25 per cent tariff and threatened with an additional penalty, Asian peers have tariffs between 15 to 20 per cent. Inclusion of pharmaceuticals and energy products in the list of goods with tariffs, will also affect India’s exports.
Quick estimates by GTRI suggest that India’s merchandise exports to the US may come down by 30 per cent from $86.5 billion in FY25 to $60.6 billion in FY26. India’s merchandise export performance is projected to contract by 4 per cent in FY26 and compared to April 2025, US tariff impact on India is likely to be at 0.3-0.4 per cent of the GDP, finds Care Ratings.
India’s $10.7 billion textile exports will be badly hit as the competitors, including Bangladesh, Philippines, Vietnam, Pakistan and Cambodia have lower tariffs than India. Increased exports to the UK and European Union can mitigate some impact.
About $9 billion valued pharmaceutical products too will have to bear the brunt this time as they are not included in the list of products exempted from tariffs. A large portion of $10 billion gems and jewellery exports and $2 billion valued shrimp shipments will be affected.
Though semiconductors are exempted, Indian exports of these products are negligible, finds Ashok Chandak, president of India Electronics and Semiconductor Association. Exports of electronic goods worth $10 billion are being fuelled by mobile phone exports. However, this time, mobile phones also are not spared.
Petroleum goods worth $4.1 billion too will face intense competition. A sharp contraction in the value of oil exports by around 15.5 per cent is expected.
