GTRI: Supply Chain Fixes and Holiday Demand Boost US-India Export Rebound
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After a slump, India's exports to the US saw a strong comeback in November, fueled by supply chain adjustments and holiday restocking, says GTRI. Read the analysis.
Following a couple of months of decline, India's export figures to the United States experienced a resurgence in November. The Global Trade Research Initiative (GTRI) attributes this rebound largely to adjustments in supply chains and the replenishment of inventories in preparation for the holiday shopping season.
Notably, this recovery occurred even as the United States has been levying 50% tariffs on certain goods imported from India since August.
**November Trade Figures Show Strong Gains**
Specifically, exports to the US jumped by 22.61% in November, reaching $6.98 billion. This surge effectively reversed the downward trend observed from May to September.
A closer look at specific sectors reveals the following:
- Smartphones:** After a dip from $2.29 billion in May to $884.6 million in September, exports climbed to $1.8 billion in November.
- Gems and Jewelry:** This sector saw exports slide from $500.2 million in May to $202.8 million in September, followed by a recovery to $406.2 million.
- Machinery and Mechanical Appliances:** Exports in this category fell to $516.8 million in September before rebounding to nearly peak levels, reaching $614.6 million in November.
- Pharmaceuticals:** While shipments improved to $669.2 million in November, they remained below the levels seen in May.
- Mineral Fuels and Oils (tariff-exempt):** Exports decreased from $291.5 million in May to $251.5 million in September and then edged up to $274.3 million.
According to GTRI, the recent upswing follows an export downturn earlier in the year. The uncertainty around impending tariff increases triggered this initial slump. Ajay Srivastava, the founder of GTRI, noted that American buyers initially postponed placing orders and depleted their existing stock. "Once the higher tariffs became a certainty, exporters and US buyers began adjusting. They absorbed some of the cost, renegotiated prices, and shifted their focus towards products less affected by the tariffs or difficult to replace," Srivastava explained.
That said, the reality is a bit more complicated. the GTRI cautions that this recovery may not be sustainable. They suggest that the rebound is more indicative of businesses adapting to the higher tariffs, rather than a fundamental improvement in trade conditions. The think tank also pointed out that companies are deploying short-term tactics to navigate the evolving trade landscape.
