India's largest foreign market, the United States, has seen a massive collapse in exports of Indian goods. In September alone, Indian exports to the US market fell by 20 percent. In addition, Indian exports to the country have fallen by about 40 percent in the last four months.

Indian exports have plummeted after the high tariffs imposed by US President Donald Trump's administration took effect, according to government statistics.

It said that the first month of the implementation of the 50 percent tariff imposed by the United States on Indian goods was completed in September. The US tariff on the country's goods came into effect on August 27. The tariff also includes an additional 25 percent penalty imposed by the US for India's continued purchase of oil from Russia.

Ajay Srivastava of the Global Trade Research Initiative (GTRI), a New Delhi-based think tank, said the US has become the most affected market for India after the tariff hike. The two countries are in talks on a trade deal, with the aim of reaching an agreement by next month.

According to GTRI, the biggest hit from the tariffs has been on India's labour-intensive sectors. These sectors include textiles, gems and jewellery, engineering products and chemical products. These labour-intensive Indian sectors have suffered the most due to the US tariffs.

India's exports to the US have declined for four consecutive months, falling from $8.8 billion in May to $5.5 billion in September. This means that India's exports to the US market have fallen by 37.5 percent.

India's trade deficit has also widened due to the decline in exports, reaching a 13-month high of $32.15 billion in September. However, the increase in trade with countries such as the United Arab Emirates (UAE) and China has offset some of the losses.

Meanwhile, trade talks between India and the United States resumed last month after months of stalemate. An Indian delegation is currently participating in the talks in the United States.

Trump said on Wednesday that Indian Prime Minister Narendra Modi had agreed to stop buying oil from Russia, as Washington seeks to increase economic pressure on the Kremlin as part of efforts to end the war in Ukraine.

A spokesperson for India's Ministry of External Affairs said that discussions with the US government were "ongoing" and that they had "shown interest in deepening energy cooperation with India."

However, there are still some major unresolved issues between the two countries on trade issues. In particular, the two countries are still in a stalemate over access to agriculture and dairy.

Washington has been seeking access to India's agricultural sector for years. Although India opposes US access to its agricultural sector, New Delhi is opposing the US decision on this issue, citing food security of the country's citizens, livelihoods and the interests of millions of small farmers.

A few months ago, the United States was India's largest trading partner. Bilateral trade between the two countries reached $190 billion in 2024. Trump and Modi had set a goal of increasing this trade volume to $500 billion.