India's Export Resilience to the US
India's exports to the United States demonstrated notable resilience in Fiscal Year 2026, increasing by 0.9% to reach $87.3 billion. This growth places India among the top ten nations experiencing the largest absolute increases in exports to the US. A study by the Indian Council for Research on International Economic Relations (ICRIER) highlighted these shifts in export patterns, a year after the implementation of US tariffs.
The Smartphone Phenomenon Fuels Growth
The primary driver behind this overall export expansion was a dramatic surge in India's smartphone exports. These exports nearly doubled from $10.6 billion in FY25 to $19.7 billion in FY26. This significant increase occurred even as products subject to the US tariffs saw their exports decline by 11.2%. Conversely, items on the tariff exclusion list, including smartphones, experienced a 24.5% rise in exports, leading to the net positive gain.
"China+1" Strategy Accelerates Shift
The remarkable growth in India's smartphone exports is largely attributed to global technology firms, prominently Apple, adopting a 'China+1' supply chain strategy. This strategic pivot, a direct response to the US-China tariff war, led to a substantial decline in China's share of US smartphone imports, falling from 81% in 2024 to 45.2% in 2025. India capitalized on this shift, becoming a critical manufacturing hub.
Divergent Trends and Other Key Gainers
While smartphones led the charge, other product categories also registered significant gains in exports to the US. These included optical fibres, bundles and cables, heparin salts and therapeutic substances, portable computers, static power converters, herbicides, and computer monitors. However, the report also noted that export diversification to alternative markets did not uniformly cushion the impact of US tariffs across all products. While some major export losers like frozen shrimp and gold jewellery found growth in other markets, others, such as unwrought gold and tankers, experienced an overall decline.
China Emerges as a Key Trading Partner
Interestingly, China emerged as the largest destination for India's export expansion, with exports increasing by 36.6% to $5.2 billion in FY26. This surpassed growth to all other major trading partners. However, this growth in exports to China was only weakly aligned with the specific products that saw the largest declines in the US market, suggesting a broader diversification rather than a direct substitution for US demand.