Even after trade wars related to tariffs, the United States of America maintains its status as India's largest export market. For the period from July 2025 to June 2026, the volume of Indian exports to the US decreased only slightly, by approximately just over 2%, yet India's share in the total volume of Indian exports remains around 20%. This indicates that although tariffs have had an impact, there has not yet been a significant drop in demand for Indian goods in the American market.
The first reason for this is that most of India's exports are not subject to the new additional 10% tariffs introduced by the US in July under Section 301. This additional levy is applied on top of existing MFN duties. According to government data, about 45% of Indian exports are exempt from this new additional tariff. These goods include general-purpose pharmaceutical products and smartphones.
Furthermore, goods such as steel, aluminum, and auto parts, which were already subject to duties under Section 232, are also not subject to this additional 10% charge. Thus, a significant portion of India's export basket has avoided the direct impact of these new tariffs.
A second important reason is linked to the strong performance of some major export sectors. Sectors such as electronics and generic pharmaceuticals have benefited from the initial tariffs, allowing them to maintain their position in the American market. For example, in June 2026, India's electronics exports showed a year-on-year growth of about 19%. In contrast, labor-intensive sectors like textiles and apparel have faced greater pressure.
The third factor is the domestic needs of the US. American companies are seeking to reduce their dependence on supply chains in China. In this situation, India benefits as an alternative manufacturing and raw material base. This does not mean that American companies have massively relocated production to India, but during the process of diversifying supply chains away from China, Indian exporters have found it easier to establish themselves in the American market.
After the tariff hikes, Indian companies began paying more attention to products with relatively low tariff impact. That is, instead of simply raising prices and increasing the burden on American buyers, companies adjusted their product range and market strategy. This is why, despite the tariff increases, the decline in the overall volume of Indian exports to the US has remained limited.
India is also important to the US because the demand for Indian goods there is not limited to one or two sectors. Electronics, pharmaceuticals, engineering goods, chemicals, precious stones and jewelry, as well as many other industries, have already established themselves in the American market. Even after the tariff increases, it is not easy to completely stop supplies from India for American buyers. This gives Indian exporters a chance to remain in the market despite the additional costs.
Nevertheless, these figures look encouraging at present, but tariff pressure has not disappeared. Under the new Section 301 levy, an additional 10% duty applies to about 55% of Indian exports, with textile and other labor-intensive sectors experiencing the greatest difficulties. The government notes that the proposed separate mechanism for textiles has not yet been launched. Thus, the current picture is that India's exports to the US have not collapsed due to tariffs.
Some major sectors remain outside the scope of tariffs because the US requires such alternative suppliers, and Indian companies are adapting their strategy to the changed conditions. However, if tariff pressure continues, difficulties may increase, especially for labor-intensive industries. Currently, the US remains India's largest export market, and its position has not weakened despite the tariffs.