India’s exports surged in November despite US tariffs, driven by currency shifts, sectoral strength, and short-term global trade dynamics.
India–US Trade: Why November Exports Jumped 22% Despite Tariffs
Table of Contents
- Introduction: A Surprising Export Surge Amid Tariffs
- Snapshot of India–US Trade in November 2025
- Reason 1: Exporters Absorbing Tariffs in Hope of a Trade Deal
- Reason 2: Diversification Beyond the US—China, Europe, and Asia
- Reason 3: Base Effect and the Easing of the Red Sea Shock
- Reason 4: Sectoral Strength—Electronics, Engineering, Pharma
- The Rupee Factor: Currency Depreciation as a Hidden Tailwind
- Data Deep Dive: What the Numbers Really Say
- Is the Export Surge Sustainable? A Reality Check
- Risks on the Horizon: Tariffs, Competition, and Global Slowdown
- What India Needs for Durable Export Growth
- Conclusion: A Tactical Win, Not Yet a Structural Shift
- Frequently Asked Questions (FAQ)
- Sources and References
1. Introduction: A Surprising Export Surge Amid Tariffs
In November 2025, India pulled off something that, just weeks earlier, seemed highly unlikely. Exports to the United States jumped by an impressive 22%, even as steep US tariffs—some as high as 50%—continued to make Indian goods more expensive in the American market. At a time when global trade is slowing and protectionism is rising, this sudden surge stood out.
What makes the rebound even more striking is the timing. India’s exports to the US had fallen for two straight months in September and October, reflecting weak global demand, higher logistics costs, and the pressure of punitive tariffs. Then, almost unexpectedly, November delivered one of the strongest export performances on record. Policymakers welcomed the numbers as a sign of resilience. Exporters described it as the result of persistence and adaptability. Markets, too, responded with cautious optimism.
But export data, much like economic growth numbers, rarely tell the full story at first glance. Behind the strong headline figures lie short-term adjustments, strategic bets by exporters, and external factors beyond India’s control. In many cases, companies chose to absorb higher costs simply to retain their foothold in the US market. In others, global supply chain disruptions and geopolitical tensions opened temporary windows of opportunity.
This blog takes a closer look at what is really driving India’s November export surge to the US, separating structural strength from temporary relief. More importantly, it asks a critical question: is this growth sustainable, or is it a brief spike before tougher realities set in? The answers offer valuable insights into the evolving dynamics of India–US trade relations and what lies ahead for Indian exporters navigating a tariff-heavy world.
2. Snapshot of India–US Trade in November 2025
📊 Visual: Line chart showing India’s exports to the US from August–November 2025.
Snapshot of India–US Trade in November 2025
Despite elevated US tariffs, India recorded one of its strongest export performances in November 2025. The data below highlights the key drivers behind this surge.
Key Highlights
| Indicator | November 2025 |
|---|---|
| Export Growth to the US | +22% YoY |
| Overall Goods Exports Growth | ~20% |
| Electronics Exports | +38% |
| Pharmaceutical Exports | +20% |
| Engineering Goods Exports | +30% |
| Rupee Depreciation (YoY) | -5.6% |
India’s Exports to the US (August–November 2025)
Sector-wise Export Growth in November 2025
📊 November emerged as one of India’s strongest export months on record, but the surge reflects a mix of tariff absorption, currency effects, and short-term global disruptions—making context essential.
Despite punitive tariffs, November emerged as one of India’s strongest export months on record—but context is crucial.
3. Reason 1: Exporters Absorbing Tariffs in Hope of a Trade Deal
One of the most important—but least sustainable—drivers of the November surge is exporters absorbing tariff costs.
Why Would Exporters Do This?
Indian exporters are betting on an imminent India–US trade deal, under which:
- The US may roll back 25% of tariffs
- India has already:
- Increased crude oil imports from the US
- Committed to sourcing 10% of LPG imports from the US
- Signaled openness to nuclear sector reforms
This strategy is akin to a shopkeeper selling at a loss to keep loyal customers, hoping profits will return later.
But There’s a Catch
Exporters report:
- No fresh orders beyond December
- Existing contracts likely to expire soon
- Buyers already shifting to Vietnam and Bangladesh
📌 Example:
Textile exporters in Tiruppur estimate ₹7,000 crore worth of winter orders lost, a blow that could echo for years.
4. Reason 2: Diversification Beyond the US—China, Europe, and Asia
India’s November export performance was not just a US story.
China and Hong Kong: A Geopolitical Opportunity
- Exports to China surged 90%
- Exports to Hong Kong rose 35%
This spike is linked to China restricting imports from Japan, particularly seafood, amid bilateral tensions. Indian exporters stepped in to fill the gap.
Export Growth to Key Markets (November 2025)
India’s November export surge was supported by strong gains across multiple markets, particularly China and Hong Kong, alongside a rebound in shipments to the United States.
📊 Export growth reflects geopolitical shifts in Asia and short-term demand adjustments in the US and European markets.
📊 Visual: Bar chart showing export growth to China, Hong Kong, and the US.
Europe: CBAM-Induced Stockpiling
Ahead of the Carbon Border Adjustment Mechanism (CBAM) kicking in on January 1, 2026:
- European buyers rushed to stock Indian engineering goods
- Exports rose sharply to:
- Germany: +25%
- Belgium: +30%
- Spain: +180%
This is classic pre-tax stocking behavior, not long-term demand expansion.
5. Reason 3: Base Effect and the Easing of the Red Sea Shock
Another statistical illusion boosting November numbers is the base effect.
What Happened Last Year?
In November 2024:
- Red Sea shipping routes were disrupted by Houthi attacks
- Container shortages spiked freight costs
- Shipping was rerouted via the Cape of Good Hope
As a result, exports last year were artificially depressed.
Why That Matters
Comparing November 2025 to a weak November 2024 makes growth look stronger than it truly is.
🚢 Analogy:
It’s easier to sprint after crawling—growth looks dramatic, even if you’re only back to normal speed.
6. Reason 4: Sectoral Strength—Electronics, Engineering, Pharma
Not all growth is fragile. Some sectors show genuine momentum.
Open this link 🔗 for visual👇
https://bizinsighthubiq.blogspot.com/2025/12/india-export-basket-by-sector-november.html
Tariff-Exempt Categories
| Sector | Growth |
|---|---|
| Electronics | 38% |
| Drugs & Pharmaceuticals | 20% |
| Food items (tea, coffee, spices) | Strong growth |
The US has expanded tariff exemptions, cushioning these sectors from trade tensions.
Engineering Goods
- Largest export category
- Grew 30% in November
- Strong demand from Europe offset US weakness
India’s Export Basket by Sector (November 2025)
This pie chart illustrates the relative contribution of major sectors to India’s total exports in November 2025.
📊 Electronics, pharmaceuticals, and engineering goods dominate exports, while textiles and other sectors make up the remainder.
7. The Rupee Factor: Currency Depreciation as a Hidden Tailwind
One of the quieter but most powerful forces behind India’s export surge in November has been the weakening rupee. While tariffs, trade tensions, and global uncertainty dominated headlines, the currency quietly did some heavy lifting for exporters.
In November, the rupee breached the ₹90-per-dollar mark and was 5.6% weaker year-on-year. For India’s export-oriented businesses, this depreciation worked like an invisible price cut—helping them stay competitive even in a tough global market.
Why a Weaker Rupee Helps Exports
When the rupee falls against the US dollar, Indian goods automatically become cheaper for foreign buyers. Exporters don’t need to lower prices; the exchange rate does the job for them.
Here’s how it plays out in real life:
- Lower dollar prices: A product priced at ₹100 costs less in dollar terms when the rupee weakens.
- Better margins for exporters: Companies earn more rupees for every dollar they receive.
- Partial cushion against tariffs: With US tariffs as high as 50% on some products, a weaker rupee helps absorb part of that extra cost.
💡 Simple analogy:
Think of the rupee as a discount coupon that activates automatically. Foreign buyers pay less—even though the Indian seller hasn’t changed the price.
This currency advantage has been particularly helpful for sectors like textiles, engineering goods, electronics, and pharmaceuticals, where price sensitivity is high and margins are thin.
Why November Was Different
The timing matters. November’s export surge came when:
- Global demand was fragile
- US tariffs were still in place
- Shipping costs remained elevated
In such conditions, the rupee’s depreciation acted as a shock absorber, keeping Indian exporters in the game when they might otherwise have lost orders to competitors like Vietnam or Bangladesh.
But There’s a Catch: The Double-Edged Sword
While exporters benefit, a weaker rupee isn’t an unqualified win for the economy.
- Imports become costlier, especially crude oil, electronics components, and fertilizers
- Inflationary pressure rises, affecting consumers
- Companies dependent on imported inputs may see margins squeezed
In other words, what helps exporters today can strain households and import-heavy industries tomorrow.
The rupee’s fall has been a short-term tailwind, not a long-term solution. Currency depreciation can buy time, but it cannot replace trade agreements, productivity gains, and policy stability. November’s numbers show that exchange rates matter—but sustainable export growth needs much more than a weaker rupee.
8. Data Deep Dive: What the Numbers Really Say
A closer look at the November export data reveals a story that is far more nuanced than the headline-grabbing growth figures suggest. While the numbers look impressive on the surface, they point to temporary boosts rather than a long-term shift in India’s export strength under US tariffs.
Key Insights Behind the November Export Surge
-
Short-term tactical adjustments by exporters:
Many Indian exporters chose to absorb higher US tariffs instead of passing costs to buyers. This strategy helped protect market presence but squeezed profit margins, making it difficult to sustain over time. -
Geopolitical disruptions working in India’s favor:
Trade tensions between China and Japan, along with supply disruptions in other regions, redirected demand toward India. These gains are opportunity-driven and could reverse once global trade routes normalize. -
Statistical and base effects:
November’s growth appears amplified because exports were unusually weak during the same period last year due to the Red Sea shipping crisis. Comparing against a low base naturally inflates growth rates.
What This Means for India’s Export Outlook
Taken together, the data shows resilience—but not reinvention. The November surge does not yet signal a structural transformation in India’s export competitiveness under high tariffs. For growth to be durable, India will need tariff relief, stable trade agreements, and stronger global demand—not just favorable timing.
📊 Visual: open this link 🔗 for visual 👇
https://bizinsighthubiq.blogspot.com/2025/12/india-export-growth-analysis-structural.html
Stacked bar chart separating “structural growth” vs “temporary factors”.
9. Is the Export Surge Sustainable? A Reality Check
Short answer: not without strong policy support.
At first glance, India’s sharp rise in exports—especially to the US—looks like a major win. But a closer, more human look at what’s happening on factory floors, in export houses, and inside order books tells a more cautious story. The November export surge appears resilient, not resilient enough to sustain itself without timely intervention.
Why Sustainability Is in Doubt
-
Exporters are selling at thinner margins
Many Indian exporters are absorbing US tariffs instead of passing them on to buyers. This strategy helps retain clients in the short term, but it’s like running a marathon at sprint speed—financially exhausting and impossible to maintain for long. Small and mid-sized exporters are especially vulnerable, with profits shrinking or disappearing altogether. -
Order pipelines beyond December look weak
Industry feedback suggests that while November shipments were strong, fresh orders are drying up. Buyers remain cautious, waiting for clarity on tariffs and trade rules. Once current contracts expire, exporters fear a sharp drop in volumes early next year. -
Competitors are gaining ground
Countries such as Vietnam and Bangladesh are quickly filling the gaps left by India’s tariff-hit products. For global buyers focused on cost and certainty, these markets offer a safer alternative. Once supply chains shift, winning those buyers back becomes far harder.
What’s Missing for Long-Term Stability
-
Tariff relief
Without a rollback or reduction in US tariffs, Indian goods will remain less competitive on price. Exporters cannot indefinitely absorb these costs. -
Stable and predictable trade rules
Businesses thrive on certainty. Frequent changes in duties, exemptions, or compliance rules make long-term planning difficult and discourage new investments. -
Logistics normalization
While shipping conditions have improved since last year’s Red Sea disruptions, freight costs remain high and routes uncertain. Efficient, predictable logistics are essential for export-led growth.
The November surge shows that Indian exporters are adaptable and determined. However, resilience alone cannot replace structural support. Without policy backing, trade agreements, and smoother logistics, this export momentum risks fading by early 2026.
November was a strong push, not a guaranteed take-off. To keep exports flying, India needs more than effort—it needs enabling policies.
10. Risks on the Horizon
India’s November export surge tells a story of resilience—but the road ahead is far from smooth. Beneath the strong headline numbers lie five interconnected risks that could slow or even reverse export growth in the coming months. Each of these challenges may be manageable on its own, but together they create a pressure cooker for Indian exporters.
1. US Tariffs Remain Intact
The biggest overhang is still high US tariffs on Indian goods, in some cases touching 50%. Many exporters are currently absorbing these costs just to keep their US buyers. This strategy works only in the short term.
Margins are thinning, cash flows are under stress, and smaller exporters are especially vulnerable. Without tariff relief or a trade deal, selling into the US market could soon become economically unviable for many Indian firms.
2. Vietnam & Bangladesh Are Gaining Orders
As Indian exporters struggle with tariffs, buyers are quietly shifting orders to competitors. Vietnam and Bangladesh, particularly in textiles and apparel, are emerging as preferred alternatives due to:
- Lower tariff exposure
- Competitive pricing
- Stable supply chains
Once buyers move, they rarely return quickly. This makes the loss of orders not just a short-term hit, but a long-term erosion of India’s market share.
3. CBAM Raises Costs in Europe
Europe, another key export destination, is becoming more expensive to serve. From January 2026, the Carbon Border Adjustment Mechanism (CBAM) will impose additional costs on carbon-intensive products such as steel, aluminium, and engineering goods.
For Indian exporters who are still transitioning to greener production, CBAM acts like a hidden tariff—reducing competitiveness unless investments in clean technology are made quickly.
4. Global Demand Slowdown
Even the most competitive exporters suffer when global demand weakens. High interest rates, slowing growth in advanced economies, and geopolitical uncertainty are making global buyers cautious.
When demand softens, price-sensitive suppliers like India feel the impact first, especially in discretionary categories such as textiles, leather, and consumer goods.
5. Red Sea Risks Persist
While shipping disruptions have eased, the Red Sea crisis is not fully resolved. Many global shipping lines continue to avoid the route, keeping freight costs elevated and delivery times unpredictable.
For exporters operating on thin margins and tight deadlines, logistics uncertainty remains a serious operational risk.
The Bigger Picture
Individually, these risks are manageable. Together, they form a complex web of pressures that could undermine India’s export momentum in 2026. Navigating this environment will require policy support, faster trade negotiations, and strategic upgrades by exporters themselves.
11. What India Needs for Durable Export Growth
India’s recent export surge has shown the world that Indian businesses can adapt under pressure. But resilience alone is not enough. For exports to grow consistently and sustainably, India must move beyond tactical responses and focus on deep structural reforms. Durable export growth is built not in exceptional months, but through steady policy, predictable markets, and competitive ecosystems.
Below are the five policy priorities that can turn India’s export momentum into a long-term growth engine.
1. Fast-track the India–US Trade Deal
The United States remains India’s largest and most valuable export market. Prolonged uncertainty over tariffs discourages long-term contracts and investment.
- A trade deal would restore price competitiveness for Indian goods
- It would give exporters confidence to invest in capacity and technology
- Clear rules reduce the risk of sudden order losses to rivals like Vietnam
🤝 For exporters, certainty matters more than temporary relief.
2. Expand Tariff-Exempt Product Lists
Recent gains in electronics, pharmaceuticals, and select food products show how powerful tariff exemptions can be.
- Expanding the exempt list protects high-value sectors
- Encourages diversification beyond traditional textiles
- Helps India move up the value chain, not just increase volumes
📦 More exemptions mean fewer shocks and smoother trade flows.
3. Invest in Green Manufacturing (CBAM-Proofing)
Europe’s Carbon Border Adjustment Mechanism (CBAM) is a warning signal.
- Carbon-heavy exports will face higher costs
- Green manufacturing improves global acceptance of Indian goods
- Early investment prevents future export disruptions
🌱 Sustainability is no longer optional—it’s a trade requirement.
4. Improve Logistics and Port Efficiency
High logistics costs quietly erode India’s competitiveness.
- Faster ports reduce delivery times
- Efficient rail and road connectivity lower freight costs
- Digital customs clearance cuts delays and uncertainty
🚢 When goods move faster, exporters compete better.
5. Support MSME Exporters with Credit and Hedging Tools
Small and medium exporters are the backbone of India’s trade ecosystem, yet they are the most vulnerable.
- Affordable export credit improves cash flow
- Currency hedging protects against rupee volatility
- Simplified schemes reduce compliance burdens
🏭 Strong MSMEs mean resilient exports.
Sustainable export growth does not come from absorbing losses or chasing short-term opportunities. It comes from policy clarity, infrastructure strength, and future-ready manufacturing. India has shown resilience—now it must build permanence.
12. Conclusion: A Tactical Win, Not Yet a Structural Shift
India’s November export surge is impressive—but misleading if taken at face value.
It reflects:
- Exporter resilience
- Opportunistic diversification
- Temporary geopolitical windows
Yet beneath the optimism lies fragility. Without a trade deal and long-term competitiveness upgrades, November may prove to be a high-water mark rather than a turning point.
The real test begins in 2026.
13. Frequently Asked Questions (FAQ)
Q1. Why did India’s exports to the US rise despite high tariffs?
Because exporters absorbed tariff costs, benefited from a weaker rupee, and shipped tariff-exempt goods.
Q2. Is the export growth driven by new demand?
Mostly no. Much of it reflects stocking, base effects, and short-term geopolitical shifts.
Q3. Which sectors are most resilient?
Electronics, pharmaceuticals, and select engineering goods.
Q4. Will exports continue growing in 2026?
Only if tariffs ease and global demand stabilizes.
Q5. How important is a US–India trade deal?
Crucial. Without it, India risks losing long-term market share.
14. Sources and References
- Indian Express: India US Trade & November Export Data (Dec 18, 2025)
- Ministry of Commerce & Industry, Government of India
- Reuters: Red Sea Shipping and Maersk Updates
- WTO Trade Statistics
- RBI Exchange Rate Data
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