For ten turbulent months, Indian exporters lived under the highest US tariff wall faced by any American trading partner. Here is how the crisis built, peaked and broke.
2025: The Escalation
April 2, 2025 — President Trump’s global “liberation day” actions impose a 26 per cent reciprocal tariff on a wide range of Indian imports. GTRI Founder Ajay Srivastava’s early modelling projected India’s exports to the US could decline by roughly 6.41 per cent, or $5.76 billion, over the year, with fish and crustaceans, iron and steel articles, and diamonds and gold products among the categories most exposed.
April 10, 2025 — Trump pauses the reciprocal tariffs for 90 days, maintaining a 10 per cent baseline duty on all US imports while trade talks proceed. Through the spring, Trump publicly says talks with India are going great, and Treasury Secretary Scott Bessent suggests India could be among the first to sign a deal.
August 7, 2025 — The reciprocal rate rises to 25 per cent under a fresh executive order. GTRI’s Srivastava, reacting the same day, called it a move that “could severely dent India’s exports to the US,” warning that “a significant chapter in India-US trade relations has entered turbulent waters,” Deccan Herald reported. Commerce Minister Piyush Goyal, facing pressure to strike a quick deal, held the line publicly, insisting that “no deal will be made under pressure,” a position widely reported at the time as underscoring Delhi’s sovereignty-first stance in the negotiations.
August 6-7, 2025 — The hammer falls. In an executive order, Trump states plainly: “the Government of India is currently directly or indirectly importing Russian Federation oil” and orders an additional 25 per cent duty, as reported by Expana Markets. Combined with the reciprocal rate, tariffs on Indian goods rise to 50 per cent — the highest among US trade partners, hitting over half of India’s $87 billion in exports to America, though pharmaceuticals, semiconductors, energy and critical minerals are exempt.
May-September 2025 — The monthly export data tells the story of a slow bleed rather than a single shock. Shipments to the US peaked in May at $8.8 billion, then fell 5.7 per cent in June to $8.3 billion, 3.6 per cent in July to $8.0 billion, and a steep 13.8 per cent in August to $6.9 billion as the 50 per cent rate took hold. September, the first full month under the punitive tariff, saw exports drop a further 20.3 per cent to $5.5 billion — the steepest monthly fall of the year and the fourth consecutive decline. Shrimp exporters were among the hardest hit, with Indian shipments to the US collapsing 43 per cent year-on-year by that August; Seafood Exporters Association of India President Pawan Kumar G described the impact as a “doomsday” scenario for the industry, SeafoodSource reported.
October-November 2025 — GTRI’s cumulative tally showed exports to the US falling 28.5 per cent between May and October, from $8.83 billion to $6.31 billion, making Indian goods among the most heavily taxed of any US trading partner — well above China’s roughly 30 per cent rate and Japan’s 15 per cent. GTRI recommended the government roll out an Export Promotion Mission to buffer exporters through the crisis.
October-December 2025 — Negotiations continue in fits and starts even as the punitive tariff remains in force. Speaking at an Indo-American Chamber of Commerce event, Goyal pushes back on suggestions that talks had stalled, saying “I don’t see any reason to be very worried. I don’t believe there is any hiatus in the relationship. It continues to be very important, very strategic for both the country, the United States and India,” Deccan Herald reported. Asked repeatedly about the timeline, he tells reporters, “whenever the deal is fair, equitable and balanced, you will hear the good news.” By late November, reports emerge that Washington may be prepared to cut India’s tariff to the 15-16 per cent range as part of a broader recalibration, while domestic industry bodies including CII and FIEO press the government for export subsidies and insurance credit to cushion exporters through the remaining months of the crisis.
2026: The Resolution
February 2, 2026 — After a call with Prime Minister Modi, Trump announces a trade deal on Truth Social: “we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%,” as Business Today reported. The punitive 25 per cent duty is rescinded, India commits to halting Russian oil purchases and buying over $500 billion in American products over five years, and US-listed Indian stocks rally sharply.
February 25, 2026 — A reminder that peace is partial: the US imposes a 126 per cent duty on Indian solar imports.
February 20, 2026 — The US Supreme Court strikes down Trump’s sweeping IEEPA tariff regime in a 6-3 ruling. Trump confirms the India deal is unchanged, telling reporters simply that it “is on,” while signing a replacement 10 per cent global tariff under separate legal authority within hours of the verdict.
Ongoing — Negotiations continue on the comprehensive Bilateral Trade Agreement, launched back in February 2025, covering services, investment, IP and non-tariff barriers.
How India Compared
Through the worst of the crisis, India’s position looked especially exposed next to its regional peers. China, despite years of separate trade friction with Washington, faced a reciprocal rate of roughly 30 per cent through the same period — a full 20 percentage points below India’s 50 per cent peak. Japan and the European Union settled into a 15 per cent baseline months before India secured any relief at all. Vietnam and the Philippines, competitors to India across textiles, footwear and electronics assembly, were held near 20 per cent. For Indian exporters bidding against these countries for the same American retail shelf space, the gap was not academic — it was the difference between winning and losing a contract on price alone, and it is the single biggest reason GTRI and industry bodies treated the eventual 18 per cent settlement as urgent relief rather than a modest improvement.
The Takeaway
The tariff war cost India dearly for half a year and reshaped its energy sourcing permanently. Its ending restored access to India’s largest export market — at 18 per cent, not zero. The scars, and the lessons about dependence on any single market, remain, and the monthly export figures from that grim May-to-September stretch are likely to be cited by Indian trade negotiators for years as the cautionary case for diversification.
