India’s export engine hit a rough patch in October, with tariff shocks and geopolitical tensions dragging down shipments across most major markets. The latest data from the trade think tank GTRI showed India’s year-on-year exports grew in only five of its top 20 destinations.
According to Ajay Srivastava, Founder of GTRI, India’s export performance in October showed sharp divergences across its major markets. Double-digit declines in several key destinations—from Singapore and Australia to Italy and the UK—underscore the vulnerability of India’s outbound trade to global demand fluctuations and policy headwinds, he notes.
“Overall shipments in October fell 11.8%, marking one of the clearest signs yet of a pressure-ridden export landscape. Spain (+43.43%) and China (+42.35%) led the gains, driven largely by higher petroleum product shipments, while Hong Kong (+6.00%), Brazil (+3.54%), and Belgium (+2.22%) saw marginal increases.”
The remaining 15 markets posted declines in October, highlighting broad external weakness. Exports to the US fell 8.58%, while shipments to the UAE slipped 10.17%. Several destinations reported far deeper contractions: Singapore (–54.85%), Australia (–52.42%), Italy (–27.66%), the UK (–27.16%), and the Netherlands (–22.75%). Shipments also fell to Malaysia (–22.68%), Korea (–16.43%), Germany (–15.14%), France (–14.28%), Bangladesh (–14.10%), Nepal (–12.64%), South Africa (–7.54%), and (–1.12%). Overall, India sees growth in just five markets and declines in 15, reflecting a patchy and fragile export landscape.
Export contraction turns broad-based
Srivastava says India’s October export data signal a broad-based decline across major destinations, underscoring the triple squeeze of US tariffs, subdued global demand, and falling commodity prices. “Shipments to the US, India’s largest export market, dropped 8.6% year-on-year, as the 50% tariff on labour-intensive goods continued to hit apparel, leather and other MSME-led sectors. Steeper contractions were recorded in regional hubs. Exports to Singapore collapsed 54.9% on lower petroleum, jewellery, and electrical machinery shipments, while Australia registered a similar 52.4% drop, led by ready-made cotton garments, steel products, and electronics,” Srivastava adds.
MSMEs brace for a difficult stretch
MSMEs, which account for nearly 40% of India’s outbound shipments, are among the worst hit in the current downturn, with many facing squeezes on orders, margins and working capital, as global demand cools. For Rajat Mehra, Co-convenor of the CII UP MSME Panel and Director at Rajat Chemicals Industry, the strain on MSME exporters is unsurprising, given the tightening global environment.
He argues that global supply-chain protectionism, once driven by India’s Atmanirbhar Bharat agenda, has now become a worldwide trend. “Like Atmanirbhar Bharat in India, post-Covid, safeguarding supply chains is the underlying thinking across the world; that’s pushing re-shoring & near-shoring exercises, something that the country’s policymakers also need to quickly work on. One must not miss out on an important factor of Industry 4.0, which will blunt out, if not eliminate, the labour cost arbitrage advantage of under-developed/developing nations, which heavily benefited China and ASEAN countries.”
Mehra warns that without rapid adaptation, India’s MSME exporters risk losing further competitiveness.
Textile industry hit hard
Sanjay K Jain, Chairman, ICC National Textiles Committee, and MD, TT Textiles, says the US tariff, which impacts about 30% of India’s total textile and apparel exports, has already dented shipments.
He says a 10-12% fall in textile exports is unsurprising and warns that the decline may rise to 15% or more in the coming months, as existing inventory is exhausted. According to him, some goods are still being shipped despite the tariff shock because they were already in the supply pipeline, but that cushion will soon disappear.
Vikas Singh Chauhan, Director of the Home Textile Exporters Welfare Association (HEWA), says geopolitical pressures ‘pushed further by tariff jolts’ leave exporters with limited room to manoeuvre. “There is no escaping from the geopolitical pressures pushed further by tariff jolts. However, diversification holds one key route to sustain our exports,” he says.
Chauhan highlights that India’s penetration remains low in several markets where domestic exporters could expand with targeted support. “There are many EU nations where our share is even less than 1%; we need to focus on such regions. In the UK, we have 5% market share; with targeted government support, we aim to take it to 10%.”
He, however, points out that recent RBI easing on payments, extended moratoriums, and loan restructuring offer some relief, but policy uncertainty under market-focused schemes continues to create confusion.
Mukesh Kansal, Chairman of Noida-based CTA Apparels, is among those betting big on the Scandinavian countries. “In the EU, many markets remain untapped. Germany, Sweden, and Denmark are showing great demand for our products, and beyond the US, we are now going very aggressive on them,” he says, expressing hope that a US-India trade deal is only a matter of time.
New mission launched, but concerns remain
Notably, the government has recently approved Rs 25,060 crore for the Export Promotion Mission (EPM) and Rs 20,000 crore for expanding the credit guarantee scheme for exporters. The stated objective behind the mission is to support sectors most affected by US tariff hikes, including textiles, gems & jewellery, engineering goods, leather and marine products.
Commerce Secretary Rajesh Agrawal recently stated that the Commerce Ministry is preparing detailed guidelines for the EPM scheme and will begin releasing them before the end of November. The six-year mission, approved on November 12 for implementation from 2025-26, is designed to help exporters navigate sustained tariff shocks—most notably the 50% duties imposed by the US.
Chauhan, however, opines that exporters from smaller towns still struggle with systemic issues. They need policy stability and clarity rather than ‘hypothetical naming of older versions of schemes,’ he says. “Exporters, especially those from Bharat 2-3 regions, still face corruption at multiple stages, and this needs urgent correction. The fine print of the recently launched EPM is still unclear, like who is getting how much and how? Only, once the fine print is out, we will know whether exporters actually stand to benefit and whether the scheme can help us offset some of the rising operational costs we currently struggle with.”
Source Name : Economic Times