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India could lose up to USD 5 billion in exports to Vietnam if it doesn’t secure a trade deal with the U.S. that offers lower tariffs says a report in Moneycontrol. In 2023 India sent goods worth around USD 76 billion to the U.S. But only about USD 5.4 billion of those goods are also exported by Vietnam meaning the risk of direct competition is actually quite small even in a worst-case scenario. India and Vietnam both sell 161 similar products (each worth over USD 5 million) to the U.S. where India currently exports more than Vietnam. While total U.S. trade in these items is valued at USD 22 billion Vietnam could only realistically challenge India in about USD 5.4 billion worth of that trade. And when you look even closer at goods where both countries sell in large quantities and prices are very similar India’s potential losses are likely much smaller around USD 353 million. Shrimp Linen and Jewellery: India Faces Export Pressure One of the biggest risks to India’s exports lies in frozen shrimp and prawns. In 2023 India sold about USD 1.81 billion worth of these to the U.S. compared to Vietnam’s USD 290 million. But if the U.S. gives Vietnam better tariff rates India’s shrimp exports could drop sharply to just USD 224 million which means a potential loss of nearly USD 1.6 billion in this category alone. Other Indian products that could be hit include kitchen and bathroom linens with a possible loss of USD 280 million and jewellery where losses could reach USD 231 million. In all of these areas both India and Vietnam serve similar U.S. buyers. Trumps new trade deal This shift follows Trumps announcement on July 2 of a new trade deal with Vietnam which lowers Vietnam’s export tariffs to 20 per cent. This came just before the July 9 deadline after which a tougher U.S. trade policy kicks in. Under the new rules goods that are re-routed or trans-shipped into the U.S. will be taxed at 40 per cent. Vietnam was originally set to face a 46 per cent tariff but the new agreement protects it. India on the other hand could still face a 26 per cent tariff unless it quickly secures a preferential trade agreement with the U.S. Trump posted on his social media “It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam.” As of now India has not signed any new trade deal with Washington putting its key exports at a clear disadvantage compared to Vietnam.