India’s goods exports to the US rose for the first time in five months in October, jumping 14.5% from September, even as Donald Trump’s steep tariffs remain in place.
Exports to India’s largest foreign market had dropped sharply last month after 50% US tariffs on India, including a 25% penalty for buying Russian oil, kicked in on 27 August.
The improved data came as Indian state-run oil firms agreed to import more annual liquefied petroleum gas (LPG) from the US, and Trump exempted many farm goods from reciprocal tariffs that could benefit India.
Trade deal negotiations between the two countries are underway, with an Indian official saying that key aspects of the deal were nearing closure.
The jump in exports to the US came even as India’s overall goods exports fell 11.8% year-on-year in October, with 15 of its top 20 markets seeing a decline in bilateral trade.
“Tariff-exempt sectors such as smartphones and pharmaceuticals may have performed better – though this remains a tentative assumption,” said Ajay Srivastava of Global Trade Research Initiative (GTRI), a Delhi-based think tank, commenting on the latest trade numbers.
“Despite the October rebound, India’s shipments to the US have dropped nearly 28.4% between May and October, erasing more than $2.5bn in monthly export value,” Mr Srivastava added.
But trade tensions between the two countries appear to be gradually letting up after months of uncertainty.
On Monday, India said it had concluded a first-ever major deal that will see its state-run oil companies sourcing some 10% of the country’s annual LPG needs from the US.
Petroleum Minister Hardeep Singh Puri described the decision as a “historic development” and said the world’s largest and fastest-growing LPG market has now opened up to the United States.
The Trump administration has been urging Delhi to ramp up its purchase of US petroleum products and reduce its dependency on Russian oil.
India became one of the biggest markets for Russian oil as Western nations imposed sanctions on Moscow after the Ukraine war started in 2022.
Last year, India bought $52.7bn of Russian crude – 37% of its oil bill – but Trump has reiterated time and again, that the country has agreed to reduce its purchases, something India has not officially confirmed.
Delhi is walking a diplomatic tightrope on energy imports as Russian President Vladimir Putin prepares to visit Delhi early next month to finalise several agreements and projects, local reports say.
Yet trade talks between India and the US – stalled for months over Delhi’s refusal to cut Russian oil imports – now appear to be moving quickly despite this.
On Monday, a senior government official told The Hindu newspaper that the first phase of the trade deal is “more or less near closure”.
India is also set to benefit from the US’s decision to roll back reciprocal tariffs on certain agricultural products such as tea, coffee and spices – a move that, analysts say, would effectively exempt about $1bn worth of India’s agricultural exports to the US from duties.
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