India’s exports to the US also fell 21.77% to $6.6 billion in January, mainly due to the 50% tariffs imposed by the Donald Trump administration. (AI image)
India’s merchandise exports rose marginally by 0.61% to $36.56 billion in January. On the other hand, imports grew by 19.2% to $71.24 billion as against $59.77 billion in the same period last year. The result was that the country’s trade deficit increased to $34.68 billion in January.Exports in both goods and services sectors have remained on a steady upward trend. According to Commerce Secretary Rajesh Aggarwal, total exports of goods and services are expected to cross $860 billion during the current financial year.Exports increased by 2.22% to $366.63 billion in the April to January period.
Trump tariffs hit India’s exports to US
India’s exports to the US also fell 21.77% to $6.6 billion in January, mainly due to the 50% tariffs imposed by the Donald Trump administration.The US imposed a comprehensive 50% tariff on Indian goods entering its market from August 27. The two countries have since concluded an interim trade arrangement under which the US has removed 25% punitive tariffs on Indian products from February 7, while the reciprocal tariffs are set to be reduced from 25% to 18%. India’s exports are now in a competitive position among regional competitors.Exports also declined in September, October and December last year, although November saw a 22.61% increase in shipments. Meanwhile, imports from the United States rose 23.71% to $4.5 billion in January, the data showed.During the April to January period of the current fiscal year, India’s exports to the US grew by 5.85% to $72.46 billion, while imports increased by 13.87% to $43.92 billion.Exports to China increased by 55.65% to $1.63 billion during January, while imports from China increased by 16.67% to $12.23 billion. For the April-January period of the fiscal year, exports to China rose 38.37% to $15.88 billion, while imports rose 13.82% to $108.18 billion.India’s exports to countries including UAE, Netherlands, Germany, Saudi Arabia, Italy, Hong Kong, Spain, Belgium, Malaysia and Vietnam recorded positive growth during the month under review. In contrast, shipments to the UK, Bangladesh, Singapore, Australia, France and Brazil declined.In terms of imports, inflows from countries like Russia, Iraq, Korea, Germany, Thailand and Australia declined, while imports from UAE, Saudi Arabia, Switzerland, Singapore, Japan and Indonesia increased. India imports gold mainly from Switzerland, and purchases from the country rose sharply by 836.85% to $3.95 billion in January.
India’s diversified export basket
According to the Global Trade Research Initiative (GTRI), the latest trade data for January 2026 shows a significant impact of US tariffs on India’s export performance, while also giving early signs of diversification into other markets.“Shipments to the United States followed a clear three-phase pattern between April 2025 and January 2026. After a brief uptick in May, exports fell to $5.5 billion in September from $8.3 billion in June as tariff pressure increased. This was followed by a short-term recovery, with exports rising to $6.3 billion in October and $7.0 billion in November, but the rebound faded as hopes for a quick trade deal were not met. Exports fell again to $6.9 billion in December and to $6.6 billion in January. “With Washington expected to cut reciprocal tariffs on most Indian goods from 50% to 18% this week, we expect a rapid recovery in shipments,” GTRI said in a note.The broader data shows the slowdown is concentrated primarily in shipments to the US rather than reflecting a global decline. “Exports to the rest of the world remained resilient, rising from $29.9 billion to $30.0 billion (+0.3%). The data suggests that tariff barriers in the US market have driven India’s recent export slowdown, while exporters have cautiously begun expanding beyond its largest single market,” GTRI said.