0.1 Context

0.1.1 India exported goods worth $38.5 billion in December 2025, a 1.8% increase over December 2024.
0.1.2 Imports stood at $63.55 billion, resulting in a trade deficit of $25 billion for December 2025.
0.1.3 Data gains significance after the 50% US tariffs imposed from August 2025.

0.2 Export Momentum Has Weakened

0.2.1 Month-on-month analysis (seasonally adjusted) shows export momentum weakening post-tariffs.
0.2.2 Sequential momentum declined from 0.7% (Jan–Jul 2025) to 0.1% (Aug–Dec 2025).
0.2.3 Earlier momentum partly reflected front-loading of demand before tariff implementation.

0.3 Sector-Wide Export Slowdown

0.3.1 Growth slowed in electronics, engineering goods, petroleum products and textiles.
0.3.2 Pharma, chemicals, gems and jewellery witnessed sequential decline in export growth.
0.3.3 Indicates broad-based weakness, not confined to a single sector.

0.4 India’s Exports to the US Fell

0.4.1 Exports to the US declined on both annual and sequential basis after tariff imposition.
0.4.2 Average sequential momentum dropped from 1.9% (Jan–Jul 2025) to –1.4% (Aug–Dec 2025).
0.4.3 Reflects direct impact of 50% US tariffs on Indian exports.

0.5 Marginal Rise in Exports to China

0.5.1 Exports to China increased marginally by around $2 billion per month.
0.5.2 Increase is insufficient to offset the $7 billion decline in exports to the US.
0.5.3 Shows limited substitution effect in China market.

0.6 Exports to Rest of the World Remain Flat

0.6.1 Exports to countries other than the US and China remained largely flat.
0.6.2 Indicates lack of diversification into new or emerging export markets.
0.6.3 Highlights structural constraints in India’s export strategy.

0.7 Implications for Rupee and Policy

0.7.1 Lower exports reduce foreign exchange inflows, weakening demand for the rupee.
0.7.2 Puts downward pressure on exchange rate amid high imports.
0.7.3 Policymakers must diversify markets and deepen non-US export destinations to prevent tariff-led derailment.