India secures tariff edge over China, Pakistan and Bangladesh in US trade pact

India has emerged with a decisive tariff advantage over major regional competitors after the United States announced a trade agreement that slashes duties on Indian goods from 50% to 18%, easing years of trade friction between the world’s two largest democracies.

The earlier 50% levy comprised a 25% reciprocal tariff and an additional 25% import duty imposed in response to India’s purchase of Russian crude oil. Under the new deal, Washington has withdrawn the punitive Russia-linked duty, leaving only a revised reciprocal tariff in place.

A White House official confirmed to Reuters that the additional import penalty tied to Russian oil purchases had been removed, significantly lowering the overall tariff burden on Indian exports.

India pulls ahead of regional rivals

With the revised 18% rate, India now enjoys lower tariffs than several competing export economies in Asia. Compared to China and Pakistan, Indian goods will face substantially lighter duties, strengthening New Delhi’s position in the US market.

According to the White House, tariff rates on imports from other countries stand as follows:

Higher tariffs

• China: 37%
• Brazil: 50%
• South Africa: 30%
• Myanmar: 40%
• Laos: 40%

Lower tariffs

• European Union: 15%
• Japan: 15%
• South Korea: 15%
• Switzerland: 15%
• United Kingdom: 10%

Comparable rates in Southeast Asia

• Bangladesh: 20%
• Vietnam: 20%
• Malaysia: 19%
• Cambodia: 19%
• Thailand: 19%
• Pakistan: 19%

The comparison places India closer to major US allies and preferred trading partners, underlining the strategic significance of the revised rate.

Trump announces deal, links it to oil shift

US President Donald Trump announced the agreement on his social media platform, Truth Social, following a conversation with Prime Minister Narendra Modi.

“It was an Honor to speak with Prime Minister Modi… We spoke about many things, including Trade, and ending the War with Russia and Ukraine,” Trump wrote.

He claimed Modi had agreed to halt purchases of Russian oil and increase imports from the United States and “potentially, Venezuela”, arguing that the move would help “END THE WAR in Ukraine”. Trump added that the bilateral relationship would grow stronger going forward.

India has already begun slowing Russian oil purchases. Reuters reported that imports fell to around 1.2 million barrels per day in January and are expected to decline further in the coming months.

PM Modi hails boost for ‘Made in India’

Prime Minister Modi welcomed the agreement, describing it as a major gain for Indian exporters. In a post on X, he said: “Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India.”

Key details still awaited

Despite the high-profile announcements, several elements of the deal remain unclear. Trump did not specify when the new tariff rates would take effect, how non-tariff barriers would be addressed, or which US products India has committed to purchasing. Officials from both sides have yet to release a detailed implementation framework.

The agreement comes just days after India finalised a major trade pact with the European Union, expected to cut or eliminate tariffs on more than 96% of traded goods, although sensitive agricultural products were excluded.

Together, the two deals signal a renewed push by New Delhi to secure preferential market access for Indian goods amid shifting global trade alignments.