India’s exports to the United States decreased by 12 percent in September, as tariffs raised by the Trump administration weakened the demand for textiles, jewelry, and pharmaceuticals, among others.
Negotiations continue, and as previously stated, India is also directing its exports to new destinations such as Hong Kong, Bangladesh, and the United Arab Emirates, thus “diversifying” and strengthening trade diversification as a countermeasure to tariffs and uncertainty.
India’s goods trade deficit swelled to a record $41.7 billion in October, which was clearly larger than expected.
The biggest reason was a nearly 200 percent increase in gold imports due to festive season demand. Exports to the United States weakened by 8.5 percent as heavy tariffs weighed, and exports from several industrial and textile sectors also contracted. In contrast, exports to China grew.
According to the article, the situation is expected to increase India’s current account deficit in the coming months.
The article below highlights that India’s strong domestic consumption and a smaller-than-expected dip in exports to the United States give it more leeway to negotiate new tariffs.
Exporters have offset the loss by selling to new markets they have found and by offering discounts.
India expects tariffs to decrease and is willing to be flexible, while Chinese companies increase pressure on the market, for example, by selling cheaper or exporting more of their products.
Here’s an article about how India’s trade has remained stable despite global uncertainty. There will be some repetition, but also new/supplementary information.
Exports to the United States grew, but their share of total exports has nevertheless decreased. Trade partners have diversified, and exports are now directed more broadly to Asia and Africa. The country’s currency weakened for a moment, but according to the central bank, it was a short dip caused purely by market jitters.*
India’s economy also appears to be adapting quickly to changing markets; for example, companies have expanded their products and started looking for new buyers in different countries, as noted earlier. According to experts, more diversified exports help India withstand both currency fluctuations and pressures caused by globalization, especially in the long term.
Harvard economist Jason Furman highlights that India has clearly performed better than other major economies after the COVID-19 pandemic.
Most countries are still lagging behind their previous (pre-COVID) growth trend, but according to Furman, India has risen above it and continues strong development.
Furman and international experts believe that India’s growth is based on strong domestic demand, investments, and functional digital infrastructure.
This, Furman stressed, is not a one-off rebound but the result of structural strengths.
Modi and Canada’s Carney agreed to continue free trade negotiations on the sidelines of the G20 summit.
The goal is closer economic cooperation and increasing trade to $50 billion by 2030. Efforts are being made to normalize relations after the 2023 diplomatic crisis.
The leaders of the two countries emphasized better and easier market access, and they also discussed cooperation between security and law enforcement agencies to ease previous tensions.
The rupee has risen slightly from its all-time lows, although its strengthening is still curbed by month-end dollar demand and uncertainty surrounding US-India trade negotiations.
The central bank is expected to support the currency, especially in the forward markets. Some believe that potential tariff reductions could help it strengthen, but the country’s central bank might simultaneously replenish its foreign exchange reserves, which would naturally limit the rupee’s appreciation.
IMF arvioi Intian talouden kasvavan vahvasti noin 6.6 prosenttia vuosina 2025–26, vakaan inflaation, vahvan rahoitussektorin ja edenneen finanssikonsolidaation avulla.
Rakenteelliset uudistukset, kuten GST ja digitaalinen infrastruktuuri ovat parantaneet elintasoa ja tukevat maan tavoitetta tulla kehittyneeksi taloudeksi.
Riskit liittyvät yleisesti geotaloudellisiin probleemeihin ja Yhdysvaltain tulleihin, mutta toisaalta onneksi Intian suuri kotimarkkina tarjoaa suojaa ulkoisia shokkeja vastaan.
The Executive Board of the International Monetary Fund on Wednesday said Indian economy continues to perform well. IMF said following economic growth of 6.5% in 2024-25, real GDP expanded by 7.8 percent in the first quarter of FY26, while retail inflation declined markedly, driven by subdued food prices. It projected India’s real GDP growth at 6.6 percent in 2025-26
The agency said financial and corporate sectors have remained resilient, supported by adequate capital buffers and multi-year low non-performing assets. On the fiscal management, IMF said fiscal consolidation has advanced, and the current account deficit has been contained, supported by resilient service exports. IMF said India’s inflation is projected to remain well contained, reflecting the one-off effect of the GST reform and continued benign food prices.
India’s economy surprised with approximately 8 percent growth in September, even though the U.S.'s 50 percent tariffs weighed on exports.
Industry, construction, and tax cuts continued to keep domestic demand buoyant, and consumption even picked up in October. The IMF believes growth will remain strong, even though the trade agreement with the United States is stalled.
"Key Points
According to two experienced economists, the weak assessment given by the IMF on India’s economic figures is fully justified. According to them, the problem stems from the fact that in India, nearly half of the economy consists of informal small business activities, for which there are no proper statistics. Therefore, the state estimates its size by monitoring the development of the official, registered business sector and assumes that both then simply move at the same pace. The problem is that this is not always the case – for example, after demonetization, GST reform, and the pandemic, the informal sector falters, even though the official economy might then look quite lively. In other words: GDP estimates can be significantly off.
One of the economists, Kumar, estimates that the actual GDP might be only about half of the official estimate and considers the recent 8.2 percent growth figures to be implausible. He also emphasizes that a large number of assumptions underpin the quarterly figures because, for example, data is collected too infrequently and with outdated indices.
Both economists agree that without better statistics, the figures will not hit the mark. 
Putin visits India to strengthen economic, energy, and defense cooperation and to discuss oil matters with Nare Modi, on which the United States has applied pressure and tariff increases. Trump connects. India defends its purchases of Russian oil with its growing energy needs, but at the same time seeks to balance its relations with the United States and Russia as the war in Ukraine continues.
At this meeting, agreements are expected on trade, investments, and labor mobility. Fertilizer and energy cooperation, such as the Kudankulam nuclear power project, are also on the agenda. In defense matters, India seeks to advance the delivery of delayed S-400 systems, and the country is also considering additional acquisitions and the modernization of its Russian equipment.
The EU and India are trying to finalize their free trade agreement by the end of this year.
More than half of the negotiations are already complete, but market access for cars, steel, and services is still a sticking point.
Both emphasize that cooperation is a long-term investment between two major economic and demographic giants.
Herve Delphin stated that a 40-member EU negotiator team is arriving in Delhi this week to resolve lingering hurdles. Current bilateral goods trade stands at approximately USD 136 billion, making the EU India’s third-largest trading partner after the US and China.
India’s central bank is allowing the rupee to weaken, as the currency is pressured by a larger trade deficit and also dwindling dollar inflows.
The RBI intends to intervene only in strong fluctuations and not, so to speak, defend a certain level. A weak rupee could diminish foreign investors’ interest, even though the economy continues to grow strongly.
More on the matter in the article below. 
India aims to expand its exports to Russia by increasing sales of, for example, cars, electronics, textiles, and machinery, the country’s trade minister said before Putin’s visit. The goal is, among other things, to balance trade between the two countries.
India cut its key interest rate as expected to 5.25 percent, as the central bank warned of so-called soft spots in the economy.
Inflation has calmed down, but industrial production, PMI figures, and exports seem to be slowing down, especially under the pressure of the United States’ 50 percent tariffs.
Growth was still strong in the autumn, but demand and the rupee have weakened in recent weeks, and lending activities haven’t really picked up either.
India’s Finance Minister Nirmala Sitharaman says that the rupee’s exchange rate is determined by economic fundamentals, not by political noise.
The rupee has fallen to a record low of 90.43 against the dollar due to sales by foreign investors and rising oil prices, but has already recovered slightly. She acknowledges her previous political statements about the rupee’s weakness, but now says that the exchange rate should be viewed more through economic growth, inflation, and the current account balance.
Reserve Bank of India (RBI) Governor Sanjay Malhotra emphasized that the RBI does not aim for any specific exchange rate level or range. The rupee is thus allowed to float freely, as currency markets are considered efficient and functional in the long term to balance fluctuations.
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High-ranking US officials are coming to India to accelerate political and trade relations, despite underlying issues such as tariffs and Pakistan-related matters.
They will meet Indian leaders, visit ISRO (India’s space organization), and at the same time, the countries will begin three-day negotiations on a new trade agreement.
U.S. Deputy Trade Representative Rick Switzer and other USTR delegates will visit India from December 9–11 to continue negotiations for a bilateral trade agreement.
The goal would be to agree on a framework that would ease the U.S.'s 25 percent tariff and additional punitive duties on Indian products and help raise trade between the countries to $500 billion by 2030.
The agreement would be important for India, as the U.S. is India’s largest trading partner and the tariffs have already reduced India’s exports to the U.S.