India’s US Exports Rebound 14.5% as First Phase of Trade Deal Nears Closure

India’s goods exports to its largest foreign market, the United States, saw a significant recovery in October, jumping 14.5% from the previous month. This marks the first month of growth since the Trump administration imposed steep 50% tariffs on August 27.

The tariffs—which include a 25% penalty specifically for India’s high-volume purchases of Russian oil—had caused a sharp drop in September, erasing over $2.5 billion in monthly export value since May.

Despite India’s overall goods exports falling 11.8% year-on-year in October, analysts suggest the US rebound may be due to strong performance in tariff-exempt sectors such as smartphones and pharmaceuticals.

Crucially, diplomatic and trade actions suggest tensions are easing:

The US has exempted many farm goods from reciprocal tariffs, a move expected to benefit about $1 billion worth of Indian agricultural exports, including tea, coffee, and spices.

A senior government official confirmed this week that the first phase of the proposed bilateral trade deal, which is meant to address the 50% tariffs, is “more or less near closure.”

The first phase of the deal is expected to specifically resolve the controversial 25% penalty tariff linked to Russia.

In a separate but related move, Indian state-run oil companies confirmed they have signed their first-ever structured deal to source approximately 10% of the country’s annual LPG (liquified petroleum gas) needs from the US, beginning in 2026.

Petroleum Minister Hardeep Singh Puri called the decision a “historic development,” noting it opens up the world’s largest and fastest-growing LPG market to the US, a step seen as helping to balance the trade surplus in India’s favour.