India's exports to US down almost 12% in September
What's the story
India's exports to the United States have witnessed a major decline, according to a recent report by CRISIL. The rating agency revealed that merchandise exports to the US fell by 11.9% in September, amounting to $5.5 billion. This comes after a growth of 7% in August. The fall is mainly due to the Donald Trump administration's decision to impose a 50% tariff on Indian goods from August 27 onward.
Market shift
Exports to non-US markets show resilience
While exports to the US have taken a hit, shipments to non-US markets have shown remarkable resilience. CRISIL's report highlights that these exports grew by 10.9% in September, up from a 6.6% growth in August. This stark contrast between the two markets showcases India's ability to diversify its export destinations amid global trade challenges.
Export challenges
Global growth slowdown may affect India's merchandise exports
CRISIL has warned that India's merchandise exports could face headwinds from the US tariff hikes and a wider global growth slowdown. The World Trade Organization expects global merchandise trade volumes to grow by 2.4% in 2025, down from 2.8% in 2024. These projections indicate a challenging global trade environment for countries like India that heavily rely on exports for economic growth.
Economic forecast
Current account deficit to remain manageable
Despite the challenges posed by US tariffs and global growth slowdown, CRISIL expects India's current account deficit (CAD) to remain within manageable limits. The agency's forecast suggests that CAD will be around 1% of GDP in the current fiscal year, up from 0.6% last year. This projection is based on strong services exports, steady remittance inflows, and easing crude oil prices supporting India's economic stability amid external trade challenges.