Tariff Headwinds: India’s Export Growth Slows In December

Export Performance  
India’s export momentum faced a setback in December 2025, following strong performance in November. According to official data, merchandise exports grew by 1.9 percent year on year to USD 38.51 billion, compared to USD 37.8 billion a year earlier. The slowdown was attributed to additional tariffs imposed by the United States, which impacted competitiveness of Indian goods.  

Trade Balance  
Despite the tariff pressure, shipments to key markets such as China, the US, and the UAE showed resilience, with double digit growth over the April to December period. However, services exports contracted, adding further strain to overall trade performance. India’s trade deficit widened to USD 25 billion in December, up from USD 20.6 billion a year earlier, underscoring the challenges exporters face in balancing global demand and policy shifts.  

Key Highlights  

• Merchandise exports rose 1.9 percent to USD 38.51 billion in December  
• Trade deficit widened to USD 25 billion from USD 20.6 billion last year  
• US tariffs imposed in August dragged December shipments  
• Shipments to US fell marginally to USD 6.88 billion from USD 7.01 billion  
• Services exports contracted, adding pressure to overall trade balance  
• Government initiatives aim to support exporters and diversify markets  

Impact And Reflection  
The December slowdown highlights the vulnerability of India’s export sector to global policy changes. While diversification into West Asia and Europe offers opportunities, sustained resilience will depend on easing tariff pressures and strengthening domestic competitiveness.  

Final Takeaway  
India’s export story remains resilient but faces near term challenges from tariff headwinds and global uncertainties.  

Sources: Economic Times, Reuters, Business Standard