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India Scores 'Best Deal' in US Trade Pact, Outshines Neighbors & China

An interim India-US trade framework indicates India has secured highly favorable terms, including a uniform 18% tariff rate on its goods. This rate places India close to US allies and gives it a significant advantage over regional competitors like China, Pakistan, and ASEAN nations facing much higher tariffs. The deal is expected to boost key Indian export sectors such as textiles, engineering goods, leather, and chemicals. Economists view the breakthrough as a major positive for India's real economy, exports, and market sentiment.

Key Points: India-US Trade Deal: India Gets Best Terms, Lower Tariffs

  • 18% US tariff gives India competitive edge
  • Rate close to US allies like UK & EU
  • Boosts textiles, engineering, leather exports
  • Strengthens position vs. China & ASEAN rivals
  • Path opened for wider tariff removal
2 min read

Interim framework shows India got best US trade deal compared to others

India secures favorable 18% US tariff rate in interim trade deal, gaining edge over China, neighbors, and ASEAN rivals for key exports.

"this breakthrough is unequivocally positive for the real economy/exports, sentiments as well as financial markets - Radhika Rao"

New Delhi, Feb 7

Although full details are yet to emerge, the interim India-US trade deal framework indicates that India has received 'best deal' from the United States compared to others, including all its neighbours.

The trade deal unlocks the power of two large democracies working together for the shared prosperity of their people, giving unprecedented opportunities for farmers, MSMEs, entrepreneurs, and skilled workers.

The uniform 18 per cent rate gives India an edge over several countries in its neighbourhood and the wider region. Many of those exporters face higher barriers or less predictable access to the US market.

The 18 per cent rate also narrows the gap with Europe, which faces a 15 per cent tariff.

The US tariff on Indian goods comes close to those being levied on America's closest allies, which include the United Kingdom (10 per cent), the European Union (15 per cent), Switzerland (15 per cent), Japan (15 per cent), and South Korea (15 per cent).

Some of the countries facing the highest tariffs from the US include Brazil (50 per cent), Myanmar (40 per cent), Laos (40 per cent), China (37 per cent), and South Africa (30 per cent).

The smaller difference improves the price position of Indian products. It helps exporters in textiles, apparel, leather goods, chemicals, and engineering items.

It also strengthens India's hand against regional rivals competing on cost. The framework also opens a path to tariff removal on a wide range of Indian goods.

Moreover, the reduction of US tariffs on India effectively takes India's rate below most ASEAN peers and puts it at an advantageous position compared to China.

"At the onset, this breakthrough is unequivocally positive for the real economy/exports, sentiments as well as financial markets, while further details are awaited," DBS Group Research Senior Economist Radhika Rao said. Textiles, gems and jewellery, engineering goods, leather, and chemicals are likely among the key gainers in the immediate term, she added.

India is now among the nations with one of the lowest tariff rates being imposed by the Donald Trump administration compared with other Asian economies such as China, Pakistan, Indonesia, Bangladesh, and Vietnam.

- IANS

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Reader Comments

P
Priya S
Good news, but let's wait for the full details. The article says "interim framework" and "details are yet to emerge". We need to see what concessions India had to make in return. Hope it's truly balanced.
R
Rohit P
Beating China's 37% with our 18% is the real headline here! This will attract a lot of manufacturing away from China and into India. A strategic masterstroke for job creation and economic growth.
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Sarah B
As someone working in the leather goods export sector, this is the boost we've been waiting for. Competing with Bangladesh and Vietnam just got easier. Hope the benefits actually reach the small workshops and artisans.
V
Vikram M
While the deal seems positive, I'm concerned about the impact on our farmers. Often in these large agreements, agricultural sectors get pressured. I hope the government has protected their interests as well.
M
Michael C
The geopolitical angle is interesting. Being placed in a tariff bracket close to UK, EU, Japan shows the US views India as a key strategic partner, not just a trading one. This strengthens our position globally.

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