NEW DELHI: The newly modified tariffs announced by the US government have placed India among the major economies facing the highest duty rates—25% or more. Other countries in this bracket are mostly smaller or geopolitically isolated nations such as Syria, Laos, and Iraq.
What’s particularly concerning for India is that most ASEAN and South Asian countries—key competitors in labour-intensive exports like textiles and leather—have been spared the steep hikes. Vietnam, Bangladesh, Malaysia, Indonesia, and Cambodia now fall in the 19–20% tariff range.
While China has been excluded from the latest tariff list (Annex I), an earlier executive order—Executive Order 14298 dated May 12, 2025—already mandates a 34% tariff on Chinese goods. The current executive order from President Donald Trump states:
"Nothing in this order shall be construed to alter or otherwise affect Executive Order 14298 of May 12, 2025 (Modifying Reciprocal Tariff Rates To Reflect Discussions With the People’s Republic of China)."
This means that India still technically enjoys a lower tariff than China. However, the margin has narrowed—and given China’s well-known strength in low-cost manufacturing, that slight rate difference could easily be offset by sheer scale and pricing efficiency.
What has baffled many trade experts is that Vietnam, with which the US had a trade deficit of $113 billion in 2024—the largest in Asia after China—has managed to stay within the 20% bracket. That said, the order clarifies that any trans-shipments through third countries like Vietnam will attract a 40% duty.
Bangladesh, another direct competitor to India in the textile export market, has also been placed under the 20% tariff slab. Even Pakistan, which doesn’t pose significant competition in most export sectors, has received a 19% tariff rate — a development that is seen as more of a diplomatic win for India’s western neighbour than a commercial threat.
With a 25% tariff and an unspecified penalty linked to India's oil and defence deals with Russia, India now finds itself among the worst-hit by what many are calling the "Trump Tariff" regime.
Negotiations are reportedly ongoing, but India is unlikely to yield on sensitive issues such as the import of genetically modified (GM) foods and dairy products.
“The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, workers, entrepreneurs, exporters, MSMEs, and all sections of industry. We will take all necessary steps to secure and advance our national interest,” Commerce and Industry Minister Piyush Goyal told Parliament.
For now, India is staring at a 25% tariff wall, unless it chooses to bend backwards to accommodate the whims and fancies of President Donald Trump.