As of September 17, 2025, the provisional data from the Ministry of Commerce, RBI, US Census Bureau, and BEA indicate cumulative US-bound exports of india at $73 billion (goods $45 billion, services $28 billion) and imports at $37 billion, yielding a $36 billion surplus—a decline from pre-tariff projections due to a 43% merchandise drop. Globally, exports reach $419.2 billion, imports $469.8 billion, with a $50.6 billion deficit despite services surpluses.
Tariffs are projected to reduce GDP growth by 0.5–1% in 2025. It would result in a reduction in the GDP growth rate by 0.5–1 percentage points. The baseline projected growth rate of India is 6-6.5% in 2025-26 without tariffs. This means the new projected growth rate of India would be 5–5.5% in 2025-26 due to tariffs alone. It does not mean a multiplicative reduction like taking 0.5–1% of the 6.5% growth rate (which would only shave off a very minor and insignificant portion of GDP).
In economics, projections like this always describe impacts on growth rates in terms of percentage points added or subtracted—it’s a common point of confusion between “percent” and “percentage points.”
With monthly US exports falling from $11.19 billion in March to $6.5–7.0 billion in September, risking 1–2 million direct manufacturing job losses and 3–5 million indirect impacts, elevating unemployment to 6.5%. Stock markets declined 8–10% in late August, erasing $500–700 billion in capitalization, with Nifty 50 at -0.7% YTD and Sensex at -0.2%. Rupee depreciation (1 USD = Rs. 88, -5% YoY) enhances export competitiveness (+2–3% volumes, Rs. 7,392–11,088 billion) but widens import costs (Rs. 880–1,320 billion deficit expansion) and curbs consumption (PFCE growth to 6.0% in Q4 FY25, dragging FY26 by 0.8–1.2 points). Data distinguishes pre-tariff/exemption (April 1–September 7) and post (September 8–30) periods, with NTBs threatening 15–20% of services exports ($6 billion half-year loss). This growth has not been equitable, with large segments remaining vulnerable to poverty and food insecurity.
Impact Of US Restrictions: Pre- vs. Post-Tariff/Exemption And Potential Losses
Tariffs severely affect textiles, gems, apparel, and chemicals (30–70% volume loss), spurring April front-loading (+18% YoY) but causing a 14% goods dip in August ($6.86 billion). Exemptions shift 15–40% market share to rivals, endangering 50,000+ MSMEs. Services face NTBs like 20% H-1B reductions and taxes, impacting IT/BPO (50–57% US-bound, $225 billion FY25). Annual affected goods loss: $41.6 billion (from $60.2 billion); half-year: ~$20.8 billion. Total potential loss: $27.3 billion (goods $21.3 billion, services $6 billion), plus indirect employment costs (Rs. 1,760 billion in lost wages at Rs. 88/USD).
| Category | Pre-Restriction Exports ($B) | Pre % YoY | Post-Restriction Exports ($B) | Post % YoY | Potential Loss ($B) | Loss % of Pre |
|---|---|---|---|---|---|---|
| Goods to US | 42.0 | +18.0 | 3.0 | -43.0 | 21.3 | 50.7 |
| Services to US | 26.5 | +12.0 | 1.5 | +8.0 | 6.0 | 22.6 |
| Total to US | 68.5 | +15.5 | 4.5 | -10.0 | 27.3 | 39.9 |
Notes: Pre = April–September 7; Post = September 8–30. Losses: Goods from 70% sector declines/exemptions; Services from NTBs. Includes $4.4 billion FII outflows. Sources: Ministry, BEA; rupee loss ~Rs. 2,402 billion.
Global Trade Overview: Balancing Goods, Services, And Broader Economy
Goods exports: $220 billion (+2.5% YoY; pre: $215B +3%, post: $5B flat). Imports: $368 billion (+2.5%; pre: $360B, post: $8B). Services: $199.2 billion exports (+10.6%; pre: $195B +11%, post: $4.2B +5% pre-NTB), imports $101.8 billion (+3.8%), surplus $97.4 billion. Deficit: $50.6 billion (0.2% GDP, trimmed 0.5%). Rupee supports exports (4–5% uplift, Rs. 19,360 billion stronger) but pressures imports/oil (Rs. 1,760–2,200 billion). August: Goods $35.1 billion (+6.7%), services $34.1 billion (+12%). Annual projection: $850–860 billion exports, tempered by 6.5% unemployment rise.
| Category | Goods Amount (Pre/Post) | Goods YoY (%) | Services Amount (Pre/Post) | Services YoY (%) | Total Amount | Key Drivers |
|---|---|---|---|---|---|---|
| Exports | 215 / 5 | +3.0 / -43.0 | 195 / 4.2 | +11.0 / +5.0 | 419.2 | IT/BPO, pharma; tariff/NTB drags |
| Imports | 360 / 8 | +2.5 / +3.0 | 100 / 1.8 | +4.0 / +4.0 | 469.8 | Oil ($100B), machinery; consumption cliff |
| Surplus/Deficit | -145 / -3 | +2.5 / -10.0 | +95 / +2.4 | +14.0 / +10.0 | -50.6 | Services offset; GDP trim 0.5% |
Sources: RBI BoP, Ministry; rupee effects noted.
The US As A Strategic Partner: Tariff Dynamics And NTB Pressures
US share: 17–20% exports. Goods: $45 billion (+18% pre; post flat), imports $25 billion, surplus $20 billion (pre: $19.5B, post: $0.5B). Services: $28 billion exports (pre: $26.5B +12%, post: $1.5B; $195 billion FY25 projection, -7.1% from taxes), imports $12 billion, surplus $16 billion. Combined: $36 billion (pre: $34.5B, post: $1.5B). Rupee +5% revenue boost (Rs. 3,168 billion) but curtails imports 1–2%. NTBs threaten 60% IT share; exemptions disadvantage vs. Vietnam (15–40% diversion). Diversification: EU +12%, UAE services +20%.
| Category | Global Total | To/From US (Goods, Pre/Post) | To/From US (Services, Pre/Post) | US Share (%) | Notes |
|---|---|---|---|---|---|
| Exports | 419.2 | 42 / 3 | 26.5 / 1.5 | 17.3 | Depreciation aid; $27.3B loss risk |
| Imports | 469.8 | 24 / 1 | 11.5 / 0.5 | 7.9 | Cost inflation; MSME closures |
| Surplus/Deficit | -50.6 | +18 / +2 | +15 / +1 | N/A | Surplus erodes; unemployment +1–2% |
Sources: Ministry, RBI, BEA, USTR.
Economic And Employment Landscape: Navigating Tariff Shocks, Gig Economy, And Social Vulnerabilities
India’s unemployment rate is calculated via the Periodic Labour Force Survey (PLFS) by MoSPI, using Usual Status (principal + subsidiary activity over the year) and Current Weekly Status (activity in the reference week). The rate is (unemployed / labour force) × 100, where labour force includes employed (working ≥1 hour/week or major time/year) and those seeking work. CMIE provides alternative estimates, often higher due to stricter criteria. Total employment includes all forms; permanent (formal, regular wage with benefits) is ~10–12% of total; gig (platform/informal freelance) is a subset of non-permanent, growing rapidly but lacking stability.
From 2014–2025, total employment rose from 47 crore to 66 crore, driven by services (IT +12%) and gig growth (from ~4 million in 2014 to 12.7 million in 2025). However, growth masks informal dominance (~89% workforce), with tariffs exacerbating urban/youth distress (~23%). Official PLFS unemployment averaged 4–6%, but blended PLFS/CMIE data shows higher structural rates (e.g., 4.2% in 2024, rising to 6.5% in 2025). Focusing on permanent jobs, unemployment appears elevated as only ~10% qualify as “employed,” highlighting underemployment. Gig absorbs labor but inflates precarious roles. In permanent structure, government jobs hold ~40% share (central/state/PSUs ~2.5–3 crore), private ~60% (~3.5–4 crore), stable over the period per EPFO/RBI data.
| Year | Total Employed (Crore) | Permanent Formal (Crore) | Non-Permanent (Crore) | Gig (Million) | Unemployment Rate (%) | YoY Change Total (%) | YoY Change Permanent (%) | YoY Change Gig (%) |
|---|---|---|---|---|---|---|---|---|
| 2014 | 47 | 4.7 | 42.3 | 4 | 5.0 | – | – | – |
| 2015 | 48 | 4.8 | 43.2 | 4.5 | 5.0 | +2.1 | +2.1 | +12.5 |
| 2016 | 49 | 4.9 | 44.1 | 5 | 5.0 | +2.1 | +2.1 | +11.1 |
| 2017 | 50 | 5.0 | 45.0 | 5.3 | 6.0 | +2.0 | +2.0 | +6.0 |
| 2018 | 51 | 5.1 | 45.9 | 5.4 | 5.0 | +2.0 | +2.0 | +1.9 |
| 2019 | 52 | 5.2 | 46.8 | 6.8 | 4.0 | +2.0 | +2.0 | +25.9 |
| 2020 | 53 | 5.3 | 47.7 | 7.7 | 8.0 | +1.9 | +1.9 | +13.2 |
| 2021 | 55 | 5.5 | 49.5 | 8.7 | 6.0 | +3.8 | +3.8 | +13.0 |
| 2022 | 57 | 5.7 | 51.3 | 9.9 | 7.3 | +3.6 | +3.6 | +13.8 |
| 2023 | 59 | 5.9 | 53.1 | 11.2 | 8.0 | +3.5 | +3.5 | +13.1 |
| 2024 | 62 | 6.2 | 55.8 | 12.0 | 4.2 | +5.1 | +5.1 | +7.1 |
| 2025 | 66 | 6.3 | 59.7 | 12.7 | 6.5 | +6.5 | +1.6 | +5.8 |
Notes: Unemployment blends PLFS/CMIE; permanent ~10–12% share, govt 40%/private 60%. Gig from NITI Aayog. Comparative analysis: Total grew 40%, permanent 34%, gig 218%. UR peaked at 8% in 2020/2023, rising with tariffs. Sources: PLFS, CMIE, NITI Aayog, ILO.
Disguised unemployment persists in agriculture (25–35%), manufacturing (5–10%), and services (10–15%), averaging 15–18% of workforce, fully counted as employed in data (100% for permanent/gig), understating true rates by 15–20%.
| Year | Disguised in Agriculture (%) | Disguised in Manufacturing (%) | Disguised in Services (%) | Total Disguised (% of Workforce) | YoY Change Total (%) |
|---|---|---|---|---|---|
| 2014 | 30 | 10 | 15 | 18 | – |
| 2015 | 30 | 10 | 15 | 18 | 0 |
| 2016 | 29 | 9 | 14 | 17 | -5.6 |
| 2017 | 29 | 9 | 14 | 17 | 0 |
| 2018 | 28 | 9 | 14 | 16 | -5.9 |
| 2019 | 28 | 8 | 13 | 16 | 0 |
| 2020 | 30 | 10 | 15 | 18 | +12.5 |
| 2021 | 30 | 10 | 15 | 18 | 0 |
| 2022 | 31 | 10 | 15 | 18 | 0 |
| 2023 | 32 | 10 | 15 | 19 | +5.6 |
| 2024 | 31 | 9 | 14 | 18 | -5.3 |
| 2025 | 30 | 9 | 14 | 17 | -5.6 |
Notes: Weighted by sectoral shares. Agriculture drove 70–80% of total. Sources: Economic Survey, ILO.
Social Indicators: Poverty, Hunger, And Inequality
Poverty has declined in india recently. However, ration dependency remains high at ~81 crore (56% of population in 2025), indicating vulnerability.
Hunger, per GHI, improved from 28.2 in 2014 to 27.3 in 2024 (serious level), ranking 105th in 2024.
Inequality, measured by Gini index, hovered around 33-35, with wealth Gini at ~82 in 2024, indicating rising top-end concentration (top 1% own 58% wealth).
Per Capita Income Trends And Comparisons
India’s PCI rose from ~$1,560 in 2014 to ~$2,880 in 2025 (nominal), but lags behind China ($12,500), Japan ($34,000), Germany ($53,000), US ($80,000). Neighbors: Bangladesh ($2,690), Pakistan ($1,500), Sri Lanka ($3,800), Nepal ($1,400), Bhutan ($3,500).
| Year | India PCI ($) | China | Japan | US | Germany | Bangladesh | Pakistan | Sri Lanka | Nepal | Bhutan |
|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 1560 | 7670 | 48500 | 55000 | 48000 | 1080 | 1300 | 3800 | 760 | 2600 |
| 2015 | 1600 | 8100 | 44000 | 57000 | 42000 | 1200 | 1400 | 3900 | 800 | 2700 |
| 2016 | 1700 | 8100 | 39000 | 58000 | 42000 | 1400 | 1500 | 3900 | 800 | 2800 |
| 2017 | 2000 | 8800 | 38000 | 60000 | 44000 | 1600 | 1600 | 4100 | 900 | 3000 |
| 2018 | 2000 | 9900 | 39000 | 63000 | 48000 | 1700 | 1500 | 4100 | 1000 | 3200 |
| 2019 | 2100 | 10200 | 40000 | 66000 | 47000 | 1900 | 1300 | 3700 | 1100 | 3400 |
| 2020 | 1900 | 10500 | 40000 | 64000 | 47000 | 2000 | 1200 | 3700 | 1100 | 3000 |
| 2021 | 2200 | 12500 | 39000 | 70000 | 51000 | 2200 | 1500 | 3700 | 1200 | 3500 |
| 2022 | 2400 | 12700 | 34000 | 76000 | 49000 | 2600 | 1600 | 3400 | 1300 | 3600 |
| 2023 | 2500 | 12600 | 34000 | 80000 | 53000 | 2700 | 1400 | 3600 | 1300 | 3700 |
| 2024 | 2400 | 12500 | 34000 | 81000 | 53000 | 2700 | 1500 | 3800 | 1400 | 3700 |
| 2025 | 2880 | 13000 | 35000 | 83000 | 54000 | 2690 | 1500 | 3800 | 1400 | 3500 |
Notes: Nominal USD. Sources: IMF, World Bank.
Stock Market Fiasco: Tariff-Induced Volatility
Tariffs caused an 8–10% August crash ($500–700 billion loss), with $4.4 billion FII outflows vs. 2024 inflows. Nifty 50: -0.7% YTD (Q3 -1.8%), Sensex -0.2% (-1.5% Q3). Midcaps -4.0%, Bank Nifty -2.5%. Exemptions fuel fears, projecting full-year -2.0% Nifty.
| Index | 2024 Return (%) | 2025 YTD (%) | Key Impact |
|---|---|---|---|
| Nifty 50 | +11.9 | -0.7 | -2.5% post-tariff; rival diversion |
| BSE Sensex | +12.4 | -0.2 | Flat after 0.9% weekly losses |
| Nifty Midcap | +16.7 | -4.0 | 11% volatility; SME export hits |
| Bank Nifty | +9.4 | -2.5 | Trade finance slowdown |
Sources: BSE, NSE; August 28 drop -0.85%.
Sectoral Insights And External Pressures
Pharma ($18–20B +10%, partial exempt), IT/BPO ($140B +12%, NTB-vulnerable). Imports: Oil $100B. US: Gems/IT pre-surge, steel/autos -25% post. Rupee hedges tariffs but NTBs loom; $5–7B rushed shipments. Geopolitics offset by ASEAN pivots; digital shifts buffer employment, though gig precarity rises.
India-China Bilateral Trade: Historical Context And Recent Trends
China goods deficit: $101B (2024), services surplus $0.5B. Cumulative April–September 2025: Exports $7.8B (+12%), imports $60.5B (+8.5%), deficit $52.7B (Rs. 4,638B). Rupee aids exports (+2–3%), inflates imports (Rs. 440B).
| Year | Goods Exp. | Goods Imp. | Goods Bal. | Serv. Exp. | Serv. Imp. | Serv. Bal. | Total Bal. |
|---|---|---|---|---|---|---|---|
| 2014 | 11.3 | 60.4 | -49.1 | 1.2 | 1.0 | +0.2 | -48.9 |
| 2015 | 9.0 | 60.4 | -51.4 | 1.1 | 0.9 | +0.2 | -51.2 |
| 2016 | 8.0 | 55.4 | -47.4 | 1.0 | 0.8 | +0.2 | -47.2 |
| 2017 | 8.3 | 59.3 | -51.0 | 1.2 | 1.0 | +0.2 | -50.8 |
| 2018 | 16.7 | 70.3 | -53.6 | 1.4 | 1.1 | +0.3 | -53.3 |
| 2019 | 16.7 | 70.8 | -54.1 | 1.5 | 1.2 | +0.3 | -53.8 |
| 2020 | 21.2 | 65.3 | -44.1 | 1.6 | 1.3 | +0.3 | -43.8 |
| 2021 | 21.3 | 97.5 | -76.2 | 1.7 | 1.3 | +0.4 | -75.8 |
| 2022 | 17.8 | 101.7 | -83.9 | 1.8 | 1.4 | +0.4 | -83.5 |
| 2023 | 16.7 | 101.7 | -85.0 | 1.9 | 1.5 | +0.4 | -84.6 |
| 2024 | 17.0 | 118.0 | -101.0 | 2.0 | 1.5 | +0.5 | -100.5 |
| 2025* | 17.5 | 123.0 | -105.5 | 2.1 | 1.6 | +0.5 | -105.0 |
*2025 projected; sources: Ministry, UN COMTRADE, RBI.
| Category | Goods | Services | Total | YoY (%) | Notes |
|---|---|---|---|---|---|
| Exports | 7.2 | 0.6 | 7.8 | +12.0 | Pharma; rupee +2–3% |
| Imports | 60.0 | 0.5 | 60.5 | +8.5 | Electronics; Rs. 440B inflation |
| Surplus/Deficit | -52.8 | +0.1 | -52.7 | N/A | INR Rs. 4,638B |
Sources: Ministry, RBI.
2025-26 Impacts And Projections As Per Analytics Wing Of Sovereign P4LO
(i) From 6.3-6.5% baseline (World Bank/OECD), drags total 2.5-4 pp,
(ii) Projected GDP Growth For 2025-26: 2.5-4% GDP of India in 2025-26, risks -38.46% contraction (from 6.5% to 4%) by 2026 if unchecked.
See 2025-26 Impact And Projection.
Outlook: Resilience Through Adaptation
FY26 exports >$850 billion, deficit <$100 billion, but tariffs/NTBs limit growth to 6.5–7%, with 6.5% unemployment and -1.5% market returns amid gig-driven “growth.” US ties ($110B+) stable in renewables; negotiations for exemptions/NTBs. China deficits persist; pivot to ASEAN/Latin America.
Strategy: Export promotion, formal job creation, gig upskilling with benefits, substitution—transforming shocks into quality diversified growth, while addressing persistent poverty and inequality.