The $500B Question: Charting the Tariff-Driven Collapse of India-U.S. Supply Chains

The core issue the forthcoming Bilateral Trade Agreement (BTA) aims to resolve is the current high tariffs imposed by the U.S. on many Indian goods, which stand at a combined total of 50%. This tariff is composed of a 25% Reciprocal Tariff and an additional 25% Penalty Tariff imposed specifically due to India's substantial purchase of crude oil from Russia. This 50% duty has caused significant strain on trade, particularly in export-oriented sectors like textiles and metals.

The long-term objective of the full BTA is to nearly triple the annual bilateral trade volume from the current approximately $191 billion to $500 billion by 2030. However, the charts tracking weekly container bookings from India to the U.S. provide dramatic visual evidence that this $500 billion target is now under existential threat.‍

BTA Tranche I: The Negotiated Path to Stabilization

News as recent as November 2025 indicates a potential breakthrough. Senior government officials in India have stated that the first package (Tranche I) of the BTA is "more or less near closure." This initial agreement is focused on rolling back these high duties:

• Tariffs: The U.S. is expected to withdraw the punitive 50% tariffs. India, in turn, agrees to new reciprocal tariff rates on industrial and agricultural goods, reportedly aiming for a range between 12-19%.
• Current Exemptions: The U.S. has already granted temporary tariff exemptions for 254 products (mostly agricultural), underscoring the political will to stabilize the relationship.

This imminent deal casts a vital shadow over the following data. If finalized, the container volume collapse witnessed in 2025 may prove to be a temporary—but painful—disruption.

What Weekly Container Bookings Tell Us About the Tariff Shock

The analysis below covers container booking data from 2024 through 2025, revealing the consequences of the policy the BTA seeks to reverse. Charts below are interactive (hover + scroll to see weekly TEU volume).

1. Overall Weekly Bookings (India to U.S.) – The Macro Economic Shock

The chart tracking overall weekly container bookings provides the definitive macro view. After a period of stability in the first half of 2025, volume plummeted sharply after Week 35 and settled into a sustained low plateau.

This visual collapse directly confirms the economic impact detailed by the Global Trade Research Initiative (GTRI), which reported a steep 37.5% drop in overall Indian export value to the U.S. between May and September 2025. This downturn signals that U.S. importers are facing prohibitive import costs due to the 50% duty, re resisting new orders.

2. The Great Contraction: Apparel, Carpets, and Furniture

These three labor-intensive sectors, foundational to India's export economy, show the clearest evidence of failure under the 50% tariff:

Apparel & Clothing (HS 61-62): The sharp peak early in 2025 (clear "front-loading") was followed by a collapse to a sustained low floor, representing an estimated 50% volume loss. The effective 64% duty made Indian garments immediately uncompetitive.

Carpets & Floor Coverings (HS 57): The collapse was immediate and persistent. The chart confirms that the 53% tariff effectively priced Indian carpets out of the U.S. market.

Articles of Iron & Steel (HS 73): This sector saw extreme front-loading, but the subsequent drop to just 466 TEUs (Week 43) represents the most severe industrial sourcing halt witnessed, with U.S. industrial procurement stopping dead

3. The Industrial Bifurcation: Disruptive but Sustained

These industrial and manufacturing sectors experienced high volatility, but contractual sourcing prevented total collapse:

Machinery & Electronics (HS 84-85): The stable booking floor (around 1,250 TEUs) is maintained by strategically protected Electronics (HS 85). The visible slump in the second half reflects the elimination of industrial components (HS 84) that fell under the full 50% duty.

Vehicles & Auto Components (HS 87): The sector stabilized at a new, lower baseline (around 650 TEUs). This confirms that core, essential component contracts are being honored, but the 50% tariff eliminated marginal business, favoring tariff-exempt Mexico and Canada.

Rubber and Articles Thereof (HS 40): Following a deep, immediate plunge after the tariff hit, the sector showed a strong recovery, stabilizing at a 600 TEU floor. This indicates that for specialized industrial rubber products, U.S. buyers are forced to absorb the 50% tariff because re-sourcing is too difficult.

4. The Policy Anomaly: Furniture (HS 94)

The Furniture chart provides a unique case study. After the inevitable collapse following the 50% tariff, bookings quickly stabilized at a level significantly higher than the low point. This stabilization correlates with late-year news of a U.S. proclamation that effectively slashed the tariff rate on specific furniture items (e.g., cabinetry), showing the speed with which container volumes react to favorable trade policy.

5. Medical Products (HS 30+90) – The Protected but Collapsing Sector

The booking data for this strategic sector, which includes Pharmaceuticals (HS 30), reveals that protection is not immunity. The chart shows volume consistently below 2024 levels and a severe, persistent contraction in the second half. While generic drugs were largely exempt from the 50% tariff, this deep depression confirms the trade war created a spillover effect. The general chaos led U.S. buyers to pull back across the board, even in this strategically essential sector.

Conclusion: Who is Winning India's Lost Container Volume?

The dramatic drops in Apparel, Carpets, and Iron & Steel confirm a mass market share shift. The primary beneficiaries are those competitors who secured lower final tariff rates, who are now absorbing the container volume lost by India:

1. Apparel and Textiles (HS 61-62): Market share is shifting heavily toward Bangladesh (effective tariff 36.5%) and Vietnam (reciprocal tariff 20%). While their duties rose, they gained a decisive advantage over India's 64% duty. Pakistan (29% tariff), Turkey, and Egypt are also seeing gains across various textile sub-sectors.
2. Carpets and Rugs (HS 57): The volume is being redirected to Turkey and Pakistan. Turkish carpet makers, facing a much lower 15% reciprocal tariff compared to India's 55% effective tariff, have reported an immediate increase in U.S. demand to replace Indian supply.

The charts reveal a fundamental reset in U.S.-India trade. India's most recent policy focus, the Export Promotion Mission (EPM),is a strategic move to provide urgent financial liquidity and market diversification support, acknowledging that only a rapid policy change, whether via the BTA or new market development, can prevent this trade collapse from becoming a long-term structural weakness.

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