India-US Trade Paradox: Exports Plunge on Low Tariffs, Surge on High

• India's exports to the US showed an unusual pattern between May and November 2025, defying typical trade logic.
• Exports sharply declined by 37.7% from $8.8 billion to $5.5 billion between May and September 2025, despite low tariffs (10%).
• GTRI attributes the initial decline to apprehension of rising tariffs, leading to postponed orders and focus on existing stock.
• Exports surprisingly recovered by 27.3% to $7.0 billion between September and November, even as tariffs increased to 50%.
• Recovery driven by renegotiated prices, cost absorption, focus on unique products, and US holiday season restocking.

Why It Matters: India-US trade saw an unusual trend: exports fell with low tariffs, then recovered with high tariffs.