The United States has announced a new set of tariffs that could deal a blow to India’s export competitiveness. The latest trade policy, announced on Friday, sets lower import duties for more than 50 countries — including Pakistan and Bangladesh — than those levied on India, highlighting growing tensions between Washington and New Delhi over unresolved trade issues.
Under the new tariff structure set to take effect from August 7, the US will impose a 25 per cent duty on Indian goods, while offering more favourable rates to key regional competitors. Bangladesh, a major rival in the readymade garments (RMG) segment, will face a 20 per cent tariff, despite not having a formal trade deal with the US. Pakistan, having signed a new agreement with Washington, will benefit from an even lower tariff of 19 per cent.
This shift is likely to erode India’s competitive edge in labour-intensive industries such as apparel, electronics, and footwear. Industry experts believe these revised duties could slow down the momentum India has built in non-leather footwear and electronics manufacturing in recent years.
Trump’s Frustration With India’s Trade Talks
White House economic adviser Kevin Hassett said President Donald Trump was growing impatient with stalled trade negotiations with India. “I think President Trump is frustrated with the progress we’ve made with India but feels that a 25 per cent tariff will address and remedy the situation in a way that’s good for the American people,” Hassett said, according to Reuters.
ASEAN Nations Also Score Lower Tariffs
In addition to Pakistan and Bangladesh, ASEAN nations such as Vietnam (20 per cent), and Malaysia, Indonesia, and the Philippines (19 per cent each), are set to enjoy more favourable duty structures. This raises concerns for Indian exporters in the electrical and electronics space, where these Southeast Asian nations already pose stiff competition.
India-US Trade Deal Stuck On Agriculture, Automobiles
The strained negotiations between India and the US have reportedly been held back by contentious issues — notably agriculture and automobiles. India has remained firm on its regulations around genetically modified (GM) products, particularly corn and soya, which are central to US demands for greater agricultural market access.
A report by the United States Trade Representative (USTR) earlier this year criticised India’s biotechnology regulatory framework, describing it as “slow, opaque, and politically influenced.” The USTR added that India’s existing laws, under the Food Safety and Standards Act of 2006, do not align with science-based approval systems used by exporting nations.
Diverging Priorities Keep Deal Elusive
While India seeks improved access to the US for its textiles, leather goods, and footwear, the US continues to push hard for easing the entry of its agricultural and dairy products — sectors that remain politically and economically sensitive in India. Indian farmers, many of whom operate on small holdings with minimal technological support, have expressed concerns over losing their livelihood to heavily subsidised American imports.
-
Social media post sparks communal violence in Pune village, several held
-
Stop blaming the dog — it’s the policy that bites
-
MrBeast is growing so fast that YouTube has created a new award just for him
-
PBS, NPR shutting down? Corporation for Public Broadcasting says closing soon. Check dates
-
Tim Cook just beat Steve Jobs in one major way — here’s what it means for Apple’s future
