India's exports to US drop, to non-US markets expand in Sep: Crisil

The decline followed the Trump administration's decision to impose a 50-per cent tariff on Indian goods, effective from August 27. Without the frontloading of shipments ahead of the US tariff hike, the fall would have been sharper, it noted.

The country’s overall merchandise exports rose by 6.7 per cent YoY to reach $36.4 billion in September, demonstrating resilience despite global economic headwinds and the additional US tariffs. Exports rose for the third straight month, following a similar pace in August.

Exports of organic and inorganic chemicals weakened—from a YoY growth of 3.8 per cent YoY in August to to a YoY growth of 1.8 per cent in September.

Exports of readymade garments contracted—from a YoY drop of 2.6 per cent in August to a decrease of 10.1 per cent YoY in September. Within this category, exports of cotton yarn contracted by 11.7 per cent YoY in the month compared to a contraction of 2.3 per cent in August, and those of man-made yarn contracted by 2.3 per cent YoY compared to a 3.1-per cent drop in August.

The country’s merchandise exports are facing headwinds from US tariff hikes and a broader slowdown in global growth, Crisil cautioned in a note.

Crisil expects India's current account deficit (CAD) to remain within manageable limits, backed by strong services exports, steady remittance inflows and easing crude oil prices. The CAD will be around 1 per cent of gross domestic product (GDP) in this fiscal, up from 0.6 per cent in the previous, it projected.

ALCHEMPro News Desk (DS)