Bold takeaway: India’sexports to the United States dropped sharply in January, underscoring how 50% tariffs sparked a significant shift in trade patterns, even as India broadens its market reach and steadies overall growth. But here’s where it gets controversial: the same data hint at resilience and diversification that some analysts say could reshape India’s trade landscape in the coming year.
India’s merchandise exports rose marginally in January, edging up to $36.56 billion with a 0.61% gain. Meanwhile, imports surged, up 19.2% to $71.24 billion from $59.77 billion a year earlier, driving the trade deficit up to $34.68 billion for the month.
On the brighter side, exports from both goods and services sectors continued their upward trend. Commerce Secretary Rajesh Agrawal noted that total exports of goods and services are likely to surpass $860 billion in the current financial year. For April through January, India’s exports grew by 2.22% to $366.63 billion.
Trump tariffs hit India’s exports to the US
Exports to the United States fell 21.77% in January, to $6.6 billion, a slide largely attributed to the 50% tariff regime put in place by the previous U.S. administration. The U.S. had imposed a broad 50% tariff on Indian goods from August 27. Since then, an interim trade arrangement has been reached: effective February 7, the U.S. removed 25% penal tariffs on Indian products, and reciprocal tariffs are slated to drop from 25% to 18%. This has made Indian goods more competitively positioned relative to regional peers. Earlier months also saw contractions in September, October, and December, although November shipments rose by 22.61%.
In contrast, U.S. imports into India climbed 23.71% to $4.5 billion in January. For April through January, India’s exports to the U.S. rose 5.85% to $72.46 billion, while U.S. imports into India grew 13.87% to $43.92 billion.
Trade with China showed notable momentum: India’s exports to China jumped 55.65% to $1.63 billion in January, with imports from China rising 16.67% to $12.23 billion. For April–January, exports to China increased by 38.37% to $15.88 billion, and imports from China grew 13.82% to $108.18 billion.
Other markets also contributed positively in January. Exports to nations such as the UAE, Netherlands, Germany, Saudi Arabia, Italy, Hong Kong, Spain, Belgium, Malaysia, and Vietnam posted gains, while shipments to the UK, Bangladesh, Singapore, Australia, France, and Brazil declined. On the import side, purchases declined from Russia, Iraq, Korea, Germany, Thailand, and Australia, but rose from the UAE, Saudi Arabia, Switzerland, Singapore, Japan, and Indonesia.
A notable shift in imports was a surge in gold purchases from Switzerland, with January imports from Switzerland leaping 836.85% to $3.95 billion.
India’s Diversifying Exports Basket
The Global Trade Research Initiative (GTRI) interprets January 2026 data as illustrating the tariff-driven drag on India’s US-bound exports, alongside early signs of market diversification. GTRI describes a three-phase pattern for shipments to the United States between April 2025 and January 2026: an initial uptick in May, followed by a steady decline from June to September amid tariff pressures, a short-lived bounce to $7.0 billion in November, and a renewed slowdown into December and January. With Washington signaling a reduction of reciprocal tariffs from 50% to 18%, GTRI anticipates a quicker rebound in shipments ahead.
Crucially, the broader export picture remains resilient outside the United States. Exports to the rest of the world rose slightly from $29.9 billion to $30.0 billion in January (about +0.3%), suggesting that tariff-related barriers in the U.S. market are the primary drag on India’s overall export trajectory. This points to exporters cautiously expanding beyond their largest single market while maintaining strength in other regions.
In summary, while the U.S. tariff regime has temporarily hindered India’s exports to the United States, the country is actively diversifying its export base to mitigate concentration risk. The sustained growth in non-U.S. markets, along with a favorable uptick in services and goods exports, holds potential for a more balanced and resilient trade profile in the near term.
