India’s export economy is becoming a headline issue in 2025, driven by a sharp rise in global protectionist policies. The U.S., EU, and Southeast Asia have all introduced or increased tariffs on goods imported from India, resulting in a 2.6% year-over-year drop in India’s exports in Q2 2025. As exports contribute nearly 20% to the national GDP, this poses a risk not only to the trade balance but also to employment, capital markets, and startup valuations.
Pharma Exports Face Tighter Scrutiny and Pricing Pressure
U.S. Tariffs Hit API Supply Chains
India’s pharmaceutical sector, which supplies over 20% of global generic drugs, is now facing U.S.-imposed tariffs on active pharmaceutical ingredients (APIs). These barriers increase costs and slow regulatory clearances, affecting leading players such as Sun Pharma and Lupin. To mitigate these risks, investors are leaning toward startups focused on biosimilars, domestic production, and smart diagnostics.
As part of our investment focus at Keev Capital, we continue to evaluate long-term opportunities within India’s healthcare innovation sector that prioritize R&D autonomy and supply chain resilience.
Textiles and Apparel Exports Lose Ground in Europe
Sustainability and Tariffs Drive New Compliance Challenges
India’s textile industry supports over 45 million jobs and earns $40 billion+ annually through exports, primarily to the EU and the U.S. However, new EU carbon tariffs and material sourcing rules are pushing buyers to seek alternate vendors. Indian manufacturers must now integrate sustainability with vertical automation.
Electronics and Tech Hardware Exports Face Southeast Asian Competition
Vietnam, Indonesia Gain Trade Advantages
India’s mobile and electronic components sector is feeling the squeeze from Southeast Asian competitors who benefit from more favorable trade deals. While India’s PLI scheme has driven local production, the next leap will come from embedding vertical AI into smart manufacturing workflows.
Fintech Under Indirect Pressure From Reduced Export Flow
Capital Movement Affected by Slowing Trade Volumes
Tariffs don’t directly hit fintech, but cross-border payments, trade financing, and transaction volumes shrink when exports decline. That’s why resilience in India’s fintech landscape now requires platforms that enable agile, multi-market operations with minimal dependency on legacy infrastructure.
Environmental Tech and Education Feel the Policy Ripple Effect
Green Equipment Exports and SaaS Edtech Models Face Constraints
India’s climate technology innovators and green hardware producers may face friction when exporting to nations with shifting tariff policies. Localized production and R&D are becoming vital. For investors targeting environmental tech, this means re-evaluating supply chains and partnerships.
Digital education and edtech platforms exporting content or remote learning services may face new service taxes or cross-border remittance rules. The growing education innovation sector will need to incorporate compliance-ready infrastructure from day one.
India’s Path Forward: Innovation, Diversification, and Smart Capital
India’s export economy under pressure is not a short-term issue. It signals a structural realignment of global trade, where regional blocs and self-reliant ecosystems are replacing legacy trade networks. To maintain competitiveness, India must shift from low-margin manufacturing to high-value innovation, especially in tech, healthcare, and AI.
Keev Capital is actively identifying resilient sectors, including healthcare, vertical AI, and consumer goods, that can scale amid global uncertainty.
The rising wave of tariffs is more than just a policy trend; it’s a strategic signal. India must now focus on product diversification, local sourcing, and innovation that attracts global capital even Tin a deglobalizing world. Companies prepared to adapt will not only survive, they will lead the next era of smart trade.
Investors, founders, and strategic partners can learn more about how Keev Capital supports this shift through our contact page.