India’s exports to the United States market experienced a 22 per cent surge in November 2025, following two consecutive months of decline. This made November one of the strongest months on record for Indian exporters, despite the 50 per cent US tariffs that continue to affect a broad range of products.
However, analysis suggests this surge may be due to short-term factors, indicating that a trade deal could still be necessary for sustained growth.
Key Factors Driving the Export Surge
The significant growth in exports in November was attributed to a combination of strategic and economic factors:
- Exporters Absorbing Costs: One of the prime reasons for the export surge is that exporters are bearing the tariffs-related cost to maintain market access in anticipation of an impending trade deal, hoping the US will soon revoke the 25 per cent tariffs.
- Rupee Depreciation: The rapid weakening of the Rupee against the US Dollar (breaching the 90-dollar mark in December) made Indian goods and services cheaper for foreign buyers.
- Diversification to China and Europe: Exports surged to other major markets, particularly China (up 90%) and Hong Kong (up 35%), partly benefiting from political tensions between China and Japan (especially in seafood).
- EU CBAM Stocking: Exports to European countries also rose ahead of the implementation of the Carbon Border Adjustment Mechanism (CBAM) from January 1, which typically triggers stocking. Indian exports of engineering goods to Germany, Spain, and Belgium surged by 25%, 180%, and 30%, respectively.
- Growth in Exempted Goods: Tariff-exempted goods like electronic and drugs and pharmaceuticals grew by 38 per cent and 20 per cent respectively, contributing significantly to the overall growth.
Looming Challenges to Sustained Growth
Despite the strong November performance, data suggests that the momentum is fragile, and long-term challenges persist:
- Lack of New Orders: Exporters have indicated that they are no longer receiving fresh orders, and most current orders will conclude by December. This could lead to a long-term impact, as competitors like Vietnam and Bangladesh have begun receiving orders that are moving away from India, with Tiruppur losing an estimated ₹7,000 crore worth of winter orders alone.
- Base Effect: The cumulative goods export surge was partly due to a low base effect, as exports in November last year began bearing higher costs due to the onset of the Red Sea crisis in October 2024.
- Red Sea Uncertainty: Large shipping companies continue to avoid the Red Sea shipping route, despite ceasefire hopes in Gaza, maintaining higher shipping costs via the Cape of Good Hope.
The immediate surge reflects exporter resilience and external market factors, but without a firm trade deal with the US and mitigation of supply chain disruptions, sustained growth will remain challenging.
Source: Indian Express
Related Posts:
India: Chaos at Kolkata Stadium During Messi Appearance Prompts Police Action and Government Probe
Indian Cinema Mourns as Veteran Actor Dharmendra Passes Away at 89
