Trump's tariff threat triggers export surge; India crosses $800 billion trade mark

In a dramatic end-of-year push, Indian exporters raced to ship goods to the United States to beat the reciprocal tariffs announced by former US President Donald Trump, helping the country come close to meeting its FY24 goods export target of $437 billion, according to senior officials.

A standout example of this last-minute scramble was tech giant Apple, which reportedly flew five planeloads of iPhones and other devices from India to the US in just three days. The shipments, described as "unusually high" for a traditionally lean season, were aimed at stocking American warehouses and avoiding a potential price surge once the tariffs kicked in.

Electronics weren't the only sector reacting to the tariff shock. Gems and jewellery exports to the US, routed through Mumbai’s precious cargo clearance system, soared almost sixfold in the first four days of April — jumping from $61 million during the same period last year to $344 million. Apparel exports also saw a significant uptick, with companies rushing to deliver consignments before the 10% tariff came into effect at midnight on Saturday.

India eyes $800 billion export milestone:

Thanks to the March surge, India is estimated to have surpassed the $800 billion mark in combined goods and services exports for FY24. While goods exports saw a 3% year-on-year dip, the final push helped narrow the gap, with services exports keeping the overall figure buoyant.

Earlier, a sharp 11% dip in February exports — falling from $41.1 billion in February 2023 to $36.9 billion in February 2024 — had prompted Commerce and Industry Minister Piyush Goyal to urge exporters to ramp up shipments in the final two weeks of March.

“There was a significant increase in exports during the last week of March,” confirmed Kirit Bhansali, chairman of the Gems and Jewellery Export Promotion Council. Initial estimates suggest the sector’s March exports held steady at around $1.7 billion.

Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), noted that sectors capable of air-shipping to the US witnessed a sharp rise. “I expect March 2025 exports to cross $40 billion,” he added. March 2024 exports were reported at $41.6 billion, with official trade data expected on April 15.

Government optimistic despite tariff challenges:

Despite uncertainties stemming from new US tariffs, the Indian government remains optimistic about maintaining growth in exports, especially in services, thanks to the country’s skilled workforce. A senior official highlighted that lower crude oil prices could benefit manufacturers, while US retailers may cut profit margins to cushion consumers from tariff shocks.

Typically, March sees a seasonal surge in exports, but this year, the additional pressure of tariff threats amplified the urgency for exporters. While this could lead to a slowdown in shipments in the first quarter of FY25 due to pre-shipped stock, exporters are hopeful that trade will stabilize in the coming months.