Rajkot: Gujarat’s exports to the United States fell 17.4% in 2025-26 as higher US tariffs, geopolitical disruptions and cautious buying by American customers hit shipments across several of the state’s key export sectors.Official data showed exports to the US dropped to $15.06 billion in FY26 from $18.23 billion in 2024-25, a decline of $3.17 billion.Among the worst-hit commodity groups were petroleum products, drug formulations, pearls and precious and semi-precious stones, gold and other precious-metal jewellery, ceramics and allied products, and man-made yarn. Electronic components, agrochemicals and some engineering products, however, registered growth.Industry representatives attributed the decline to tariff uncertainty, rising input and freight costs, geopolitical tensions and American buyers postponing large orders until there was greater clarity on landed costs.The US imposed a 25% reciprocal tariff on most Indian goods, followed by an additional 25% levy in August last year, taking the cumulative additional duty on several products to 50%. Pharmaceuticals, smartphones, semiconductors and certain other products were exempted.The tariff shock forced some Gujarat exporters to divert goods to the domestic market, often at lower prices, while manufacturers in some sectors cut production.“There was a significant drop in exports to the US in the last financial year. Some exporters diverted their goods to the domestic market, while others had to reduce production,” said Haresh Bopaliya, a ceramic manufacturer in Morbi.Engineering exporters in Rajkot, which supplies auto components, machine tools, castings and forgings to the US market, also came under pressure.“There was a double whammy for exporters. The high US tariffs and the geopolitical situation both affected exports,” said Paresh Patel, former president of the Rajkot Engineering Association.Mihir Madeka, director of Rolex Rings, said conditions in the American market had begun to stabilise.“Everything is coming back to normal and there are positive signs. If the geopolitical situation does not worsen, we are hoping for good exports this year,” Madeka said.Chemical exporters also faced rising raw material costs.Bhupendra Patel, chairperson of Chemexcil’s Gujarat region, said disruption around the Strait of Hormuz in March affected supplies, while sulphur—a key raw material for the chemical industry—became significantly more expensive. “The appreciation of the dollar added to cost pressures, and tariffs reduced our competitiveness,” Patel said.Tariff pressures eased after India and the US announced a framework for an interim trade agreement on February 6, 2026, under which the US agreed to reduce its reciprocal tariff on specified Indian goods to 18%.Exporters are now awaiting progress on the broader India-US Bilateral Trade Agreement, hoping greater tariff certainty and improved market access will help revive shipments during the current financial year.The pharmaceutical industry, however, remained largely insulated as generic medicines were exempt from the higher tariffs. India’s cost competitiveness and its strong position in the US generics market also cushioned Gujarat-based drug manufacturers.
