Near-double growth in smartphone exports to US cushioned impact of Trump tariffs on India in FY26: ICRIER policy brief

Thanks to smart phone exports, India’s overall goods exports to the US remained resilient in the first year of US government’s reciprocal tariff regime, increasing 0.9% growth, from $ 86.5 billion to $ 87.3 billion, in 2025-26, a policy brief published by Delhi based think-tank Indian Council for Research on International Economic Relations (ICRIER) shows.

Led by near double growth in smart phone exports, the growth in the products that were excluded from such measures by the US more than compensated for the decline in export of products that were subjected to additional tariffs, ICRIER analysis shows.

According to the ICRIER policy brief, in 2025-26, the export of smart phones rose from $ 10.6 billion in FY 2025 to $ 19.7 billion in FY 2026. “This shift was enabled by a sharp decline in China’s share of U.S. smart phone imports, which fell from 81% in 2024 to 45.2% in 2025. The decline reflected the impact of the U.S.–China tariff war and the resulting acceleration of the ‘China+1’ supply chain strategy among global technology firms, most notably Apple, which rapidly expanded and redirected its India-based production capacity towards serving the U.S. market”, the policy brief says. It points out that other products from the exclusion list and the non-exclusion list showed only moderate gains that did not exceed $ 210 million. The ICRIER analysis said exports of products covered under the exclusion list rose sharply by 24.5%, climbing from $ 29.4 billion to $ 36.6 billion, while exports of non-excluded products, or products impacted by the tariff regime, fell by 11.2% over the same period, declining from $ 57.1 billion to $ 50.7 billion.

The US government imposed reciprocal tariffs on its trade partners took effect on April 2, 2025. A universal 10% baseline tariff was applied to all countries, with higher country-specific rates imposed on those deemed to have caused large and persistent trade deficits with the United States. India was initially subjected to a reciprocal tariff of 26%, which was later revised multiple times. On March 11, 2026, the United States Trade Representative (USTR) initiated Section 301 investigations into the manufacturing policies and practices of 16 economies, including India, to determine whether structural excess capacity and overproduction in their manufacturing sectors unfairly placed U.S. manufacturers at an unfair competitive disadvantage. The findings of the investigation for India are still awaited, the policy brief, authored by ICRIER researchers Nisha Taneja, Sanjana Joshi, Vasudha Upreti, Pratik Tiwary and Yashika Khatri, notes.