Trump 50% tariff: How India stacks up against Asian, Latin American peers

The additional 25 per cent tariff announced by US President Donald Trump on Indian imports came into effect at 9.30 am on Wednesday, bringing the overall levies imposed on New Delhi to 50 per cent.

 

Trump imposed 25 per cent reciprocal tariffs on India effective August 7 — the same day duties on around 70 other countries also took effect. He later doubled the tariffs due to New Delhi's purchases of Russian oil and weapons, giving a 21-day window to negotiate an agreement. However, a deal between India and the US has not yet been reached.

 

According to a Barclays Research's report titled 'India-US tariff update: When worst fears come true', about 70 per cent of India’s exports to the US — worth $55 billion — are now under serious threat. These cover labour-intensive sectors such as textiles, gems and jewellery, leather and footwear, which depend heavily on American buyers.

 

 

Here’s a look at how these steep tariffs position India against such economies.

India at disadvantage versus competitors

India’s effective tariff rate has soared to 50 per cent, while its peers face lesser tariffs despite their larger trade surpluses with the US. 

 

Vietnam exports $120 bn to the US, or 26 per cent of its GDP, but faces only 20 per cent tariffs. China exports $525 bn to the US, facing 30 per cent tariffs, yet enjoys a tariff pause under Trump’s arrangement with Beijing. Indonesia, Malaysia, Thailand face tariffs of 19 per cent, less than half India’s rate. 

 

On a trade-weighted basis, India’s tariffs now average 35.7 per cent, compared to just 2.7 per cent at the start of 2025. By contrast, India’s tariffs on US imports remain at 9.4 per cent, highlighting the asymmetry.

 

This makes Indian exports far less competitive in the US market versus rivals in Asia and Latin America.

 

"Barring Brazil (where 50 per cent tariffs had less to do with the trade gap), most of the other emerging markets are seeing much lower tariffs (in most cases, even lower than those announced on liberation day)," the report said.

India's shipment to the US

The US is India’s single largest export market, accounting for 18 per cent of India’s total exports in 2024. 

 

Of India’s $80 billion in merchandise shipments to the US, $55 billion is now exposed to punitive tariffs, while only smartphones, petroleum products and pharma have temporary exemptions.

 

Gems and jewellery ($29 bn exports globally, one-third to the US), apparel ($21 bn, 37 per cent to US), and textiles are especially vulnerable. Barclays notes that a 60 per cent effective tariff on Indian apparel makes it nearly impossible to compete against Bangladesh and Sri Lanka, where tariffs remain 20 per cent.

 

"Although the Gross Domestic Product (GDP) exposure for India is still lower, the tariffs make it relatively tougher for India to compete for its exports to the US against these trading partners," it said. Exports to the US account for 2 per cent of India's GDP.