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Indian exporters are showing notable resilience in the face of steep US tariffs, choosing to hold firm on pricing rather than offer drastic discounts—even though the decision has resulted in reduced shipments to the United States.
Recent data indicates that despite a 50% tariff imposed by the US under former President Donald Trump, Indian exporters have largely refused to absorb the additional costs. Instead, they have maintained stable export prices and redirected goods to alternative global markets, gradually compensating for losses in US-bound shipments.
A January study by the Kiel Institute for the World Economy supports this trend, confirming long-standing economic warnings that Trump’s tariffs operate effectively as a consumption tax on American businesses and households. Analyzing shipment-level data from January 2024 to November 2025, the study found that exporters absorbed only 4% of the tariff burden, while 96% was passed on to US buyers.
Focusing on India, the report revealed that export prices to the US remained consistent with prices charged to other destinations. However, shipment volumes to the US declined by 18% to 24%, indicating that exporters chose to preserve margins rather than cut prices. The study noted that Indian exporters were successful in finding alternative buyers for goods that had become less competitive in the American market.
Industry leaders echo this assessment. Sabyasachi Ray, Executive Director of the Gems and Jewellery Export Promotion Council, said exports from India to the US in his sector fell by over 40% between April and December, but shipments to markets such as the UAE, Thailand, Hong Kong, France, and Australia increased by 23% to 40%. As a result, overall exports dipped by a marginal 0.05% during the same period. However, he noted that these newer markets are smaller and require more intensive marketing, often yielding uneven profit margins.
The impact of tariffs has not been uniform across sectors. Apparel exporter Gokaldas Exports, for example, has shared up to 15% of the tariff cost with some US buyers, while passing part of the burden down its supply chain. Despite this, the company has largely retained its US clientele and is actively expanding into the UK and European markets.
Smaller exporters, however, are facing more severe challenges. In Tiruppur, widely known as India’s knitwear hub, reports indicate that production has dropped by as much as 30%, highlighting the uneven strain caused by prolonged trade barriers.
While the long-term consequences remain uncertain, sustained tariffs could eventually hurt US consumers through higher prices and disrupt global supply chains. For now, Indian exporters appear determined to hold the line, possibly anticipating relief through legal or political channels in the near future.
