India-US trade deal: What tariffs are India's export competitors paying?

India-US trade deal: A closer look at how American tariffs on Indian exports compare with those faced by key rivals such as China, Vietnam, Mexico, Bangladesh across major sectors

US President Donald Trump on Monday announced a long-awaited trade deal with India, cutting the reciprocal tariff on Indian goods to 18 per cent from 25 per cent. Trump made the announcement on his social media platform Truth Social after speaking to Prime Minister Narendra Modi over the phone.

 

Trump said India had agreed to stop buying Russian oil and instead purchase much larger quantities from the US and, potentially, Venezuela. According to him, this move would help bring an end to the Russia-Ukraine war. He also said India would “likewise” take steps to lower its tariffs and non-tariff barriers on American goods to “ZERO”. 

 

Tariffs faced by India’s export competitors

 

Several of India's neighbours and export competitors continue to face higher tariffs on their exports to the US. Bangladesh and Sri Lanka are subject to duties of 20 per cent, while Pakistan faces a 19 per cent tariff.

 

In Southeast Asia, Vietnam’s exports attract a 20 per cent tariff. Malaysia, Thailand and the Philippines each face duties of 19 per cent. Taiwan is also subject to a 20 per cent tariff.

 

With the revised rates, Indian exports now enjoy a relative advantage. Goods from India will face an 18 per cent tariff, compared to 19 per cent for Indonesia and a much steeper 37 per cent for China.    ALSO READ | India-US trade deal: Timeline of negotiations, tariffs and turning points 

  Myanmar and Laos are subject to tariffs of 40 per cent, while South Africa faces 30 per cent and Mexico 25 per cent. Canada faces a 35 per cent tariff, and Switzerland faces a 15 per cent tariff.  The United Kingdom faces a 10 per cent tariff, and countries such as Japan, South Korea and members of the European Union pay around 15 per cent under earlier trade deals with the US.

Trump's tariffs on India: From one of the highest to among the lowest

 

Before this deal, India was among the most heavily taxed major economies in terms of US import duties. In August last year, Trump had imposed a 50 per cent tariff on Indian imports. This included a 25 per cent reciprocal duty and an extra 25 per cent levy tied to India’s continued purchase of Russian crude oil. Brazil was the only other major economy to face a similar 50 per cent tariff at the time.    ALSO READ | From auto to chemicals: Key sectors to in focus post India US Trade Deal 

  India and the US began talks on a Bilateral Trade Agreement (BTA) in March last year and have held around six rounds of discussions so far. The most recent informal talks took place in New Delhi in December, when a US trade team led by the deputy US Trade Representative visited India.

 

After that, the talks slowed down because of the year-end holidays. Discussions were also affected after both sides missed the earlier ‘Fall’ deadline and there was uncertainty over when the deal would be finalised. Since then, India and the US have been holding discussions virtually.