India’s goods exports to the United States surged by 14.5% in October 2025, marking the first increase in five months despite the Trump administration’s imposition of 50% tariffs, as trade negotiations show signs of progress and key sectors benefit from exemptions. This rebound signals a potential easing of tensions between the two nations, driven by recent agreements on energy imports and agricultural trade.
The export growth is particularly significant given that US tariffs on Indian goods, including a 25% penalty for purchases of Russian oil, took effect on August 27, 2025. Prior to October, exports had declined sharply, with a nearly 28.4% drop in shipments to the US between May and October, erasing over $2.5 billion in monthly export value according to trade analysts. The improved data came as a surprise to many observers, highlighting the resilience of certain sectors in the face of punitive measures.
Key factors behind the October recovery include India’s commitment to increase imports of US liquefied petroleum gas (LPG) and the exemption of certain agricultural products from reciprocal tariffs. Indian state-run oil companies have agreed to source approximately 10% of the country’s annual LPG needs from the United States, a move described by Petroleum Minister Hardeep Singh Puri as a ‘historic development.’ This agreement aligns with US efforts to reduce India’s dependency on Russian energy sources.
Simultaneously, the Trump administration has rolled back reciprocal tariffs on Indian agricultural exports such as tea, coffee, and spices, which could exempt about $1 billion worth of goods from duties. Analysts suggest that these measures have provided a crucial boost to India’s export economy, particularly for small and medium-sized enterprises reliant on US markets. The exemptions are seen as a goodwill gesture amid ongoing trade discussions.
Trade deal negotiations between India and the US, which had stalled over India’s refusal to cut Russian oil imports, now appear to be advancing rapidly. A senior Indian official indicated that key aspects of the first phase of the trade deal are ‘more or less near closure,’ suggesting potential for a comprehensive agreement in the near future. Both sides are working to address remaining issues, including market access and intellectual property rights.
Despite the positive trend with the US, India’s overall goods exports fell by 11.8% year-on-year in October, with 15 of its top 20 markets experiencing declines. This underscores the challenging global trade environment and the specific impact of US policies on India’s economy. Experts note that tariff-exempt sectors such as smartphones and pharmaceuticals may have performed better, though this remains a tentative assumption pending detailed data.
The diplomatic context remains complex, as India balances its relationships with the US and Russia. Russian President Vladimir Putin is scheduled to visit Delhi early next month to finalize agreements, even as the US urges reduced dependency on Russian oil. India purchased $52.7 billion of Russian crude in the previous year, accounting for 37% of its oil bill, creating a delicate diplomatic tightrope for Indian policymakers.
Looking ahead, the easing of trade tensions could lead to further cooperation, but uncertainties remain regarding the final trade deal and India’s energy import strategies. The October export data provides a hopeful sign that bilateral trade can recover despite political and economic pressures, with potential benefits for both economies if a sustainable agreement is reached.
