India Gains Trade Edge Over China, Bangladesh as US Cuts Tariffs to 18%

With the new tariff structure, India now has a clear advantage over competing export economies in the region, with lower tariff rates compared to Indonesia at 19 per cent and Bangladesh and Vietnam with 20 per cent each.

Compared to China, India now enjoys significantly lower tariffs, with tariffs levied on Beijing at 34 per cent.

India also enjoys a slight edge over Pakistan, with tariffs on Islamabad currently levied at 19 per cent.

Earlier on Monday, US President Donald Trump said that the US and India "have agreed to a trade deal" with Washington reducing the reciprocal tariff from 25 per cent to 18 per cent, "out of friendship and respect" for PM Modi. He further stated that the deal will come "effective immediately".

In his Truth Social post, Trump referred to his conversation with PM Modi earlier in the day, noting that the Prime Minister was one of his closest friends and a powerful, respected leader of India.

The US President also claimed that PM Modi had agreed to "stop buying Russian oil" and to buy much more from the US.

Trump further noted that India would reduce tariffs and non-tariff barriers against the US.

"It was an Honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO," Trump's post read.

Following Trump's post, Prime Minister Narendra Modi, in a post on X, said that it was wonderful to speak with his "dear friend President Trump" and expressed delight that "Made in India products will now have a reduced tariff of 18%".

"Wonderful to speak with my dear friend President Trump today. 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 for this wonderful announcement," PM Modi wrote in a post on X.

Meanwhile, a White House official confirmed to ANI that Washington will also drop the additional 25 per cent tariff on Indian imports imposed due to New Delhi's purchase of Russian oil, noting that India has to "cease, not just reduce, Russian oil purchases."

When asked by ANI whether the tariffs on Indian imports would be lifted in exchange for reducing Russian oil purchases, the official said, "Yes, although the agreement is that India will cease, not just reduce, Russian oil purchases."

- ANI