Where the rupee bump shows up (and where it doesn't)

HSBC's Pranjul Bhandari writes that the rupee's slide is lifting higher-tech exports such as machinery and electronics, but the middle of India's export pack is barely budging. Products in the mid-tech bucket - textiles, footwear, and plastics - have barely responded to the currency's drop. India is also losing share in intermediate goods while finished product exports climb, often built with imported parts. Mobile phones are a prime example.

Tariffs are doing a lot of the heavy lifting

"We find that India's exports face a larger tariff than its peers, especially so for its mid-tech exports," Bhandari said.

While exports increased, the gains were insufficient to shrink India's persistent trade deficit.

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Trade deals and the road to fix the "missing middle"

Policy is already shifting around this problem. Commerce Minister Piyush Goyal said Thursday that India would proceed to conclude a trade pact with the US only if Washington grants Indian exporters superior tariff access compared with rivals like Vietnam and Bangladesh. "We have to see the rate that Vietnam pays in another country, what Bangladesh goods are charged," he said. "Our rates will be better."

Bhandari said India's recent run of trade agreements could amplify the weaker rupee's benefits, especially for mid-tech sectors that have had difficulty expanding their market share. She also argued for deeper ties with East Asia, a key source of components and a major node in regional supply chains. But she cautioned that the payoff will hinge on how these agreements are executed, including rules of origin, compliance, and trimming non-tariff barriers. Combined with a weaker currency, lower tariffs could provide an "important opportunity to bring back the 'missing middle'" of India's exports.

The chart everyone's watching

The research also references "Share of India's Major Export Markets," based on data for the financial year that ended March 2026 from India's Ministry of Commerce and Industry. For everyday investors, the takeaway is simple: if India lands better market access and trims tariff friction, the mid-tech segment could finally start pulling its weight, which would ripple through suppliers, component makers and the consumer brands built on them.