First monthly increase in five months signals thawing trade relations as bilateral deal negotiations progress
India’s goods exports to the United States rose for the first time in five months in October, jumping 14.5% from September, despite steep tariffs imposed by the Trump administration remaining in effect.
Exports to India’s largest foreign market had plummeted last month after 50% US tariffs on India—including a 25% penalty for purchasing Russian oil—took effect on August 27.
Signs of Trade Tension Easing
The improved export figures emerged as Indian state-run oil firms agreed to import more annual liquified petroleum gas (LPG) from the US, and President Trump exempted numerous agricultural products from reciprocal tariffs, potentially benefiting India.
Trade deal negotiations between the two countries are currently underway, with an Indian official indicating that key aspects of the agreement are nearing completion.
Overall Export Picture Remains Challenging
The surge in US-bound exports came even as India’s overall goods exports fell 11.8% year-on-year in October, with 15 of its top 20 markets experiencing a decline in bilateral trade.
“Tariff-exempt sectors such as smartphones and pharmaceuticals may have performed better—though this remains a tentative assumption,” said Ajay Srivastava of the Global Trade Research Initiative (GTRI), a Delhi-based think tank, commenting on the latest trade figures.
“Despite the October rebound, India’s shipments to the US have dropped nearly 28.4% between May and October, erasing more than $2.5bn in monthly export value,” Mr. Srivastava added.
Historic LPG Deal Signals Warming Relations
Trade tensions between the two nations appear to be gradually easing after months of uncertainty.
On Monday, India announced it had concluded a first-ever major deal that will see its state-run oil companies sourcing approximately 10% of the country’s annual LPG needs from the United States.
Petroleum Minister Hardeep Singh Puri described the decision as a “historic development,” stating that the world’s largest and fastest-growing LPG market has now opened up to the United States.
Russian Oil Imports Remain Contentious Issue
The Trump administration has been urging Delhi to increase its purchases of US petroleum products and reduce its dependency on Russian oil.
India emerged as one of the biggest markets for Russian oil after Western nations imposed sanctions on Moscow following the start of the Ukraine war in 2022.
Last year, India purchased $52.7bn of Russian crude—37% of its oil bill—but Trump has repeatedly claimed that India has agreed to reduce its purchases, something New Delhi has not officially confirmed.
Delhi is navigating a diplomatic balancing act on energy imports as Russian President Vladimir Putin prepares to visit Delhi early next month to finalize several agreements and projects, according to local reports.
Trade Talks Gain Momentum
Yet trade negotiations between India and the US—stalled for months over Delhi’s refusal to curtail Russian oil imports—now appear to be progressing rapidly despite this issue.
On Monday, a senior government official told The Hindu newspaper that the first phase of the trade deal is “more or less near closure.”
India is also poised to benefit from the US’s decision to roll back reciprocal tariffs on certain agricultural products such as tea, coffee, and spices—a move that analysts say would effectively exempt approximately $1bn worth of India’s agricultural exports to the US from duties.
Source: BBC
