After 41-month high, Trump’s tariffs drag India’s export growth in December
India’s total shipments rose 1.9% to $38.5 billion in December, driven by the country’s diversification strategy to deepen trade ties with West Asia, Europe, Canada, Russia and China, incentives under the Export Promotion Mission and proposed free trade agreements, especially with the EU. Compared to November, exports increased by 1% last month.
Also Read | MAGA agreement is being made: USA continues trade talks with ‘true friend’ India
Service exports decreased by 4% in December to 35 billion dollars due to the high base effect. Imports of services also decreased by 2.3% to 17.4 billion dollars, leading to a surplus of 18.1 billion dollars. Services trade data for December is an “estimate” and will be revised based on the Reserve Bank of India’s next statement. Exports to the US fell 0.8% annually in the September-December fiscal year. Commercial goods imports increased by 8.8% in December, reaching 63.5 billion dollars.
Commerce Minister Rajesh Agrawal said, “Despite all the challenges we faced, we maintained positive growth. At this rate, exports of goods and services are likely to exceed $850 billion, up from $824 billion in the last fiscal year.” In the April-December fiscal year, goods exports increased by 2.4% to $330.3 billion. Growth was driven by sectors such as electronics, pharmaceuticals, meat and dairy products, seafood and engineering products.
Maritime exports are increasing
Exports of petroleum products, precious stones and jewellery, leather and cotton yarn decreased. 17 of the 30 main export sectors recorded growth in December.
“We are still waiting as there is more focus on areas in the US where tariffs are lower,” Agrawal said. “Where tariffs are higher, exporters are showing greater flexibility and holding on to supply chains… US exports (fiscal) increased on an annual basis in the first nine months of the year.”Trade diversification has helped India’s shipping and pharmaceutical exports, officials said. Maritime exports to Russia and Canada increased.
“This performance is particularly encouraging given the volatility in global trade flows and reflects the effectiveness of government initiatives aimed at boosting exports, including policy continuity, export facilitation measures, improved logistics, digitalization of trade processes and focused support to MSME exporters,” said SC Ralhan, President, Federation of Indian Export Organizations (FIEO).
While engineering exports increased by 1.3% annually in December, electronics exports increased by 16.8%.
Also Read | India denies claims that it has suspended trade with Afghanistan
Pankaj Chadha, Chairman of the Engineering Export Promotion Council of India, said, “Despite the ongoing global uncertainties, it is quite encouraging to see exports of engineering products recording a positive, albeit marginal, record in December 2025.”
Smartphone exports increased by 43.7% to $18.8 billion in the April-November period of this fiscal year; The main target of shipments was the USA, followed by the UAE, China, Portugal and Spain.
Gold imports decreased by 12.8% annually to 4.1 billion dollars in December.
geographical spread
USA, UAE and China were the top three export destinations in the April-December Financial Year. In the first nine months of the fiscal year, exports of goods to China increased by 36.7% on an annual basis and to the USA by 9.7%.
Agrawal said that the increase in India’s exports to China is pleasing, even though it is not due to any special strategy.
“The overall recalibration of supply chains around the world is helping India increase its exports to China,” he said.
Various products such as fatty foods, seafood, telecommunication equipment and spices were effective in the increase in exports to China.
Also Read | Commerce Minister: India’s overall exports expected to reach $850 billion in 2025-26
“While demand in key international markets like the US has been uneven due to inflationary pressures and geopolitical uncertainties, Indian apparel exporters have managed to hold ground through product diversification, improved compatibility and stronger focus on value-added segments,” said A Sakthivel, Chairman, Apparel Export Promotion Council.
“Looking ahead, we remain cautiously optimistic about the growth prospects of India’s RMG (readymade garment) exports this year. With global demand expected to gradually improve, India is well positioned to gain market share.”
FTA progress
Agrawal said India and Canada are trying to finalize their terms of reference (ToR) to formally start negotiations for a free trade agreement (FTA).
Canada paused the talks in 2023. The two countries decided to resume negotiations because many things have changed on the global trade front in these two years.
“The two sides are busy finalizing the Specification for a mutually beneficial trade agreement. We hope that we can complete this work soon,” he said.
