India's Export Growth Defies US Tariffs: Strengthening Position in Trade Negotiations

November exports from India reached their highest level in a decade despite steep US tariffs.

India's exports showed remarkable resilience in November, surging despite the substantial tariffs imposed by US President Donald Trump. This unexpected growth has strengthened India's position in ongoing trade negotiations with Washington and reduced pressure for hasty concessions.

Exports to the United States increased by over 22% in November compared to the previous year, exceeding India's overall export growth of more than 19%. This performance elevated total goods exports to $38.13 billion, according to government trade data released Monday.

The robust export figures have alleviated concerns about a prolonged downturn following the breakdown in trade talks and Trump's decision to double duties on Indian goods to 50% in late August—the highest rate globally. This increase included a 25% levy imposed in response to India's Russian oil purchases.

Initially, these tariffs had negatively impacted exports and driven the rupee to historic lows as investors awaited developments in trade negotiations. US-bound exports had declined nearly 9% year-on-year in October after hitting record lows in September.

Analysts suggest that November's export recovery, combined with India's strong domestic economy, has diminished New Delhi's urgency to make concessions in discussions with Washington.

"Following the recovery in US exports without any tariff relief, India now possesses the leverage to advocate for reducing tariffs from 50% to 25%, particularly after significantly decreasing Russian crude imports," explained Ajay Srivastava, founder of the Global Trade Research Initiative.

Economists attribute this resilience to diversification and robust domestic demand, factors that helped India's economy exceed forecasts with 8.2% growth in the July-September fiscal quarter. GDP is projected to accelerate to at least 7% in the 2025/26 fiscal year.

"The improvement in exports indicates resilience and diversification," noted economist Madhavi Arora from Emkay Global.

Exports to the US have been led by tariff-free sectors such as electronics, while sectors affected by tariffs have performed better than anticipated, likely because exporters have established new markets, according to Arora.

India's electronic goods exports between April and November increased by 38% from the previous year, according to official data.

The increased domestic production of smartphones by global corporations like Apple has been fundamental to India's manufacturing strategy. Between March and May, nearly all iPhones exported by Foxconn from India were destined for the United States, reflecting a realignment of India's exports to predominantly serve the US market this year.

Services exports provided additional support, totaling approximately $35.86 billion in November and contributing to a services trade surplus of nearly $18 billion, based on government estimates.

A weaker currency has also mitigated the impact of tariffs. The rupee has depreciated about 6% against the dollar this year, making it among the worst-performing major currencies globally.

Encouraged by the improved export data, Indian officials have maintained a firm position regarding US trade demands, indicating limited flexibility in areas such as agricultural imports.

According to a senior government official involved in trade talks, India has no plans to increase imports of products like corn or to permit genetically modified crops, which remain key US demands.

The Indian trade ministry did not immediately respond to requests for comment.

Indian Prime Minister Narendra Modi reportedly spoke with Trump by phone last week—their third conversation since Washington doubled tariffs on India—but the discussions remained inconclusive.

This call followed US Deputy Trade Representative Rick Switzer's two-day visit to New Delhi, which did not result in an agreement.

India's trade secretary stated on Monday that "there's a fair expectation" both nations could agree to reduce reciprocal tariffs, noting they were approaching a framework deal.

However, exporters remain cautious. While overall marine exports increased by approximately 20% during April-November to $5.7 billion, driven by higher shipments to China, Vietnam, Russia, the European Union, and the Middle East, exports to the US have decreased significantly. Exporters are concerned because US exports typically generate higher profit margins.

Pawan Kumar, managing director of Sprint Exports and president of the Seafood Exporters Association of India, revealed that his company's exports to the US had virtually ceased after tariffs of around 50% made shipments economically unfeasible.

"We are closely monitoring the negotiations," he stated. "Regaining access to the US market is the only sustainable solution."