US tariff may give India an edge, but a quarter of exports to America remain under pressure

Mon July 27 2026

India may enjoy a competitive advantage from the United States’ 10 percent Section 301 tariff compared with several rival exporting nations but nearly a quarter of its exports to the US continue to remain under stress, a Moneycontrol analysis of trade data shows.

India's exports to the US fell 16 percent 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 exports continues to struggle.

Exports that registered growth during the three-month period rose to $15.5 billion from $10.83 billion a year earlier. Of this, shipments that were exempt from reciprocal tariffs and were covered under Section 232 increased to $12.35 billion from $8.63 billion.

At the same time, exports covered by the reciprocal tariff still managed to grow, rising to $3.15 billion from $2.19 billion, indicating that Indian exporters were able to expand shipments despite the additional 10 percent duty in several product lines.

However, the data also shows that products facing tariff-related pressure continue to account for a sizeable share of trade. Exports in tariff-covered categories fell to $6.28 billion during March-May 2026 from $11.79 billion a year earlier, a decline of nearly 47 percent.

These categories accounted for almost 24 percent of India's exports to the US during the period, underscoring that a substantial portion of shipments remains vulnerable despite the broader tariff advantage. Among the biggest gainers were several niche engineering, textile and electronics products. Exports of optical fibres surged from just $98,194 to $8.8 million, while 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 recorded multi-fold increases from a year ago, albeit from relatively small bases.

While the uniform 10 percent tariff may improve India’s relative competitiveness against countries facing steeper duties, the benefits may not accrue across all categories. Diamond trade, for instance, has collapsed. Between March-May, India exported $92.19 million worth of diamonds to the US compared with $1.26 billion during the same period last year. Jewellery exports were down 70 percent, while shrimp trade declined 33 percent.

Source: https://www.moneycontrol.com