Prime Minister Narendra Modi convened a meeting with exporters from key labor-intensive sectors on Monday, November 3, 2025, to address the challenges arising from the steep tariffs imposed by the United States on Indian goods. The discussion focused on strategies to enhance India's competitiveness in the global market.
Representatives from various sectors, including apparel, leather, gems and jewellery, handicrafts, engineering, and seafood, participated in the meeting. Heads of export promotion councils for these sectors were also in attendance. From the government's side, Finance Minister Nirmala Sitharaman, Commerce and Industry Minister Piyush Goyal, Cabinet Secretary TV Somanathan, and secretaries from textiles, commerce and MSME ministries were present.
The meeting's significance stems from the substantial challenges these labor-intensive sectors face due to the 50% tariffs imposed by the U.S. on Indian goods, excluding a few exceptions. These tariffs, or import duties, play a crucial role in determining the competitiveness of goods and services.
The U.S. tariffs, which began at 10% in April 2025, escalated to 25% by early August and reached 50% by the end of August, have significantly impacted Indian exports. A report by the Global Trade Research Initiative (GTRI) revealed a sharp 37.5% plunge in India's exports to the U.S. between May and September 2025. Shipments fell from $8.8 billion to $5.5 billion, marking one of the steepest short-term declines in recent years.
The hardest-hit were goods previously exempt from tariffs, which constituted nearly one-third of India's total exports to the U.S. These exports contracted by 47%, plummeting from $3.4 billion in May to $1.8 billion in September. Smartphones and pharmaceuticals experienced the most significant setbacks. Smartphone exports, which had surged by 197% between April and September 2024-2025, collapsed by 58% in just a few months.
Labor-intensive sectors, accounting for nearly 60% of India's U.S. exports, experienced a 33% decline, from $4.8 billion in May to $3.2 billion in September. The gems and jewellery sector suffered a massive 59.5% drop, from $500.2 million to $202.8 million, affecting manufacturing hubs in Surat and Mumbai. Solar panel exports also fell sharply by 60.8%, undermining India's renewable energy export advantage.
According to GTRI, India's competitiveness has deteriorated due to the tariffs, while countries like Thailand and Vietnam have captured some of India's lost market share. For example, China faces only 30% tariffs and Vietnam 20%.
The Commerce and Industry Ministry has been consulting with exporters and industry councils to assess the impact and explore policy options. These options include sector-specific support measures, such as credit lines and cluster-based working capital funds, to ease liquidity pressures, especially for small and medium enterprises (SMEs). Protecting export-oriented units and SMEs remains a central focus of the government's strategy.
India and the U.S. are currently engaged in negotiations for a bilateral trade agreement. India's share in global trade is approximately 2% (1.6% in goods, 3.3% in services). In September, India's exports grew by 6.74% to $36.38 billion, while imports increased by 16.6%, widening the trade deficit to $31.15 billion. Cumulatively, during April-September 2025, exports rose by 3.02% to $220.12 billion, while imports increased by 4.53% to $375.11 billion, resulting in a trade deficit of $154.99 billion.
