India can give a stiff competition to Indonesia in over $1.3 billion worth of US-bound exports if New Delhi manages to snag a more favourable tariff deal with Washington, a Moneycontrol analysis has found.
On July 15, US President Donald Trump announced a deal with Indonesia, levying a 19 percent duty on imports from the Southeast Asian nation — one of the lowest among all the letters and deals announced by him.
“Indonesia will pay the United States a 19% Tariff on all Goods they export to us, while U.S. Exports to Indonesia are to be Tariff and Non Tariff Barrier FREE,” Trump announced on his Truth Social platform.
If India manages to negotiate a lower tariff, it will create room for it to expand footprint in the US market at Indonesia’s expense. Going by 2023 trade data, India could challenge $1.33 billion, or 5.7 percent, of Indonesia’s exports to the US in overlapping export categories.
But if India ends up with a higher duty, the loss would be muted. The US market exposure at risk for India would be just $1.01 billion, or 1.3 percent of its $75.8 billion exports to that country.
Even in scenarios where the tariff difference translates to just a 20 percent advantage in export value, Indonesia stands to lose nearly double of what India would.
The trade hit for Indonesia would amount to 1.1 percent of its exports to the US, while for India it would be 0.6 percent.
There is an overlap of 233 product categories in the two countries’ exports to the US. Among them, India and Indonesia directly compete in 30 categories.
Men’s suits top this list. Indonesia exported $155 million worth in 2023 and India $116 million. Other contested segments include paper products, plastic tubes, boxes and various kitchenware.
Trump’s tariff letters have now been issued to more than two dozen countries, with 12 receiving some form of relaxation compared to the "Liberation Day" tariffs announced on April 2, and eight facing steeper rates.
Comes August 1, the extended tariff pause will end and duties on most imports to the US rise again.
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