Despite Trump’s 25% Tariff, How India Still Beats Pakistan, Bangladesh On Trade Balance

India faces steep U.S. tariffs under Trump’s new trade policy, but it still maintains a more balanced trade equation than South Asian peers like Pakistan, Bangladesh and Sri Lanka due to lower tariff differentials and diversified exports.

Representative image (Source: News Drum)

New Delhi: Even as U.S. tariffs on Indian goods climb to 25 percent, the numbers tell a more layered story. Despite the blow, India still holds a stronger position in trade dynamics than some of its closest neighbours.

In 2024, Indian products entering the American market faced an average effective tariff of 17.4 percent. That is lower than the 19.9 percent slapped on Bangladeshi goods, the 18.1 percent faced by Pakistan and Sri Lanka’s 19.2 percent.

These figures come from a recent analysis by Moneycontrol that measured the effective duties levied by the United States on major South Asian exporters.

U.S. President Donald Trump, who reimposed tough trade penalties last month, had pointed fingers at India in a strongly worded post on July 30.

“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world. They have the most strenuous and obnoxious non-monetary trade barriers of any country… INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST,” he wrote on Truth Social.

However, data on what economists call the tariff differential, the gap between what a country pays in U.S. tariffs versus what it charges on American imports, suggests India’s trade relationship with Washington remains more balanced than many others in the region.

India’s tariff differential currently stands at 11.3 percentage points. That is significantly narrower than Bangladesh’s 17.2-point gap or Pakistan’s 13.6 points.

Another regional exporter, Vietnam faces a 13-point spread. Bangladesh’s position appears the most lopsided: its exports are hit by the highest U.S. tariffs, but it barely charges American goods in return.

Meanwhile, India maintains an average 6.1 percent tariff on U.S. imports, more than Bangladesh but less than others, offering a cushion against the recent spike from Washington.

Neighbouring Asian countries such as Thailand and the Philippines fare slightly better in terms of tariff balance, with gaps at 6.4 and 9.8 points respectively. But their trade mix is different, heavily skewed towards electronics and intermediate goods.

India’s exports to the United States, on the other hand, lean heavily on pharmaceuticals, garments, jewellery and consumer products. These sectors are more vulnerable to tariff hikes.

While India’s trade ties with Washington remain under strain, the data reflects that it may still be navigating the turbulence more stably than its regional peers.