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Udit Misra writes: India must widen, and deepen, its export pool to offset Trump’s tariffs

In the latest edition of his weekly column, GDP (Graphs, Data and Perspectives), Udit Misra examines how India's exports to the US, as well as the rest of the world, have been impacted by Donald Trump's exorbitant tariffs.

3 min readNew DelhiJan 16, 2026 07:30 PM IST

Indian policymakers must redouble their efforts to find newer markets and deepen existing ones outside the US. (NYT File)

India exported goods worth $38.5 billion in December 2025, a modest 1.8% increase over the $37.8-billion export figure recorded in December 2024, according to data shared by the Ministry of Commerce and Industry on Thursday.

In December, India imported far more goods than it exported, as it often does. Total goods imports during the month were pegged at $63.55 billion. This is almost 9% more than what India imported in December 2024. That means the trade deficit — the gap between exports and imports — for December 2025 was $25 billion.

The crucial bit of interest in this data was to ascertain whether a trend was emerging in the aftermath of the 50% tariffs imposed by the Donald Trump administration beginning August. It is also of interest how India’s exports to the rest of the world have behaved — not just the US — in the wake of these exceptionally high US tariffs.

A data analysis by HSBC Global Investment Research has thrown up some key takeaways.

Sequential momentum has weakened

The sequential momentum of exports have fallen post US tariffs

Instead of looking at year-on-year (y-o-y) growth rates, a look at the month-on-month (m-o-m) data (after adjusting for seasonal variations) shows that India’s export momentum has weakened.

“The sequential momentum which was averaging 0.7% m-o-m sa (seasonally adjusted) in Jan-Jul 2025 (led partly by frontloading demand) has fallen to a meagre 0.1% in Aug-Dec 2025 (post the implementation of the 50% US tariff),” says the HSBC note.

ExplainSpeaking | Trump’s tariffs reduced China’s surplus with US — and made it the world’s headache

The weakness is across the board: While it is still positive, the growth in the exports of electronics, engineering goods, petroleum and textiles has slowed. Moreover, export growth in pharma, chemicals, and gems & jewellery has fallen on a sequential basis.

India’s exports to the US fell

INDIA'S EXPORT SLOWDOWN

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Not surprisingly, thanks to the effect of tariffs, India’s exports to the US fell both on an annual and sequential basis (see chart). HSBC found that the average sequential momentum of export growth fell from 1.9% during January and July 2025 to -1.4% during August and December owing to the 50% tariffs.

Marginal rise in exports to China

This has risen, but the increase is too small (around $2 billion a month) to offset the drag created by the fall in exports to the US (around $7 billion).

Exports to the rest of the world (apart from the US and China) have been flat.

Lower export levels put pressure on India’s currency. This is because low exports imply lower demand for Indian currency, thus putting pressure on the exchange rate.

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Overall, the muted growth in exports means that Indian policymakers must redouble their efforts to find newer markets and deepen existing ones outside the US in order to ensure that the high tariffs don’t derail exports.

Udit Misra

Udit Misra is Senior Associate Editor at The Indian Express. Misra has reported on the Indian economy and policy landscape for the past two decades. He holds a Master’s degree in Economics from the Delhi School of Economics and is a Chevening South Asia Journalism Fellow from the University of Westminster. Misra is known for explanatory journalism and is a trusted voice among readers not just for simplifying complex economic concepts but also making sense of economic news both in India and abroad. Professional Focus He writes three regular columns for the publication. ExplainSpeaking: A weekly explanatory column that answers the most important questions surrounding the economic and policy developments. GDP (Graphs, Data, Perspectives): Another weekly column that uses interesting charts and data to provide perspective on an issue dominating the news during the week. Book, Line & Thinker: A fortnightly column that for reviewing books, both new and old. Recent Notable Articles (Late 2025) His recent work focuses heavily on the weakening Indian Rupee, the global impact of U.S. economic policy under Donald Trump, and long-term domestic growth projections: Currency and Macroeconomics: "GDP: Anatomy of rupee weakness against the dollar" (Dec 19, 2025) — Investigating why the Rupee remains weak despite India's status as a fast-growing economy. "GDP: Amid the rupee's fall, how investors are shunning the Indian economy" (Dec 5, 2025). "Nobel Prize in Economic Sciences 2025: How the winners explained economic growth" (Oct 13, 2025). Global Geopolitics and Trade: "Has the US already lost to China? Trump's policies and the shifting global order" (Dec 8, 2025). "The Great Sanctions Hack: Why economic sanctions don't work the way we expect" (Nov 23, 2025) — Based on former RBI Governor Urjit Patel's new book. "ExplainSpeaking: How Trump's tariffs have run into an affordability crisis" (Nov 20, 2025). Domestic Policy and Data: "GDP: New labour codes and opportunity for India's weakest states" (Nov 28, 2025). "ExplainSpeaking | Piyush Goyal says India will be a $30 trillion economy in 25 years: Decoding the projections" (Oct 30, 2025) — A critical look at the feasibility of high-growth targets. "GDP: Examining latest GST collections, and where different states stand" (Nov 7, 2025). International Economic Comparisons: "GDP: What ails Germany, world's third-largest economy, and how it could grow" (Nov 14, 2025). "On the loss of Europe's competitive edge" (Oct 17, 2025). Signature Style Udit Misra is known his calm, data-driven, explanation-first economics journalism. He avoids ideological posturing, and writes with the aim of raising the standard of public discourse by providing readers with clarity and understanding of the ground realities. You can follow him on X (formerly Twitter) at @ieuditmisra ... Read More