India’s benefit is even more pronounced when compared to China, where tariffs stay steep at 34%. Pakistan deal with tariffs of 19%.
US President Donald Trump “really” considers Prime Minister Narendra Modi a “great friend” – a remark by US ambassador Sergio Gor that now seems borne out by of outcomes. The India-US trade deal declared through the Republican leader, which took almost a year of hard bargaining and tested both New Delhi and Washington, has eventually been sealed, and more so, it places India in a stronger trade position than main regional rivals, China, Pakistan and Bangladesh.
Under the deal, the USA has decreased tariffs on Indian goods to 18%; with this revised tariff layout, India has lower levies than numerous competing export economies.
A deal better than China, Pakistan
India’s benefit is even more pronounced when compared to China, where tariffs continue to be steep at 34%. Indonesia deals with tariffs of 19%, at the same time as Bangladesh and Vietnam are subject to 20% each.
New Delhi also edges past Pakistan, which keeps to deal with tariffs of 19%, no matter showing warmer ties with Washington in latest months, inclusive of White House dinners with Islamabad’s army chief Asim Munir and official nominations of Donald Trump for the Nobel Peace Prize.
The shift will place Indian exporters in a more beneficial role across more than one sectors, particularly at a time when global supply chains are being reconfigured.
The tariff reduce is likewise anticipated to give foremost relief to India’s textile sector, a main employer strongly dependent on the USA market, in which it had been at a drawback against rivals consisting of Bangladesh, Vietnam and China because of higher duties.
Modi welcomes tariff cut
Prime Minister Narendra Modi welcomed the declaration, calling Trump a “dear friend” and emphasizing the quick advantage for Indian exporters.
“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a lower tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this awesome declaration,” PM Modi wrote in a post on X.
Trump cites friendship with Modi
Earlier on Monday, US President Donald Trump introduced that the two nations “have agreed to a trade deal”, reducing the reciprocal tariff on India from 25% to 18%.
He said the decision was taken “out of friendship and respect” for PM Modi and would come into force “effective instantly”.
In a post on Truth Social, Trump noted a conversation with Modi earlier in the day, explaining the Indian Prime Minister as one of his closest friends and a powerful worldwide leader.
“It was an Honor to talk 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, together which includes Trade, and ending the War with Russia and Ukraine. He accepted to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela,” Trump’s post read.
According to his request, effective instantly, we agreed to a Trade Deal among the United States and India, whereby the US will charge a reduced Reciprocal Tariff, decreasing it from 25% to 18%,” it added.
Trump also stated that India could reduce tariffs and non-tariff limitations against the USA as a part of the agreement.
Individually, a White House official verified to HT that Washington may even withdraw the additional 25% tariff imposed on Indian imports over New Delhi’s purchase of Russian oil.
