Does Trump's 15% tariff reset give India an edge over Asian peers?

Textiles, marine products, auto components among key beneficiaries

India is likely to be in a better position than China and most other Asian peers after US President Donald Trump announced an increase in temporary global tariffs on nearly all imports to 15 percent from 10 percent under Section 122 of US trade law, analysts said. The move came a day after the US Supreme Court struck down an earlier broad tariff programme imposed under the International Emergency Economic Powers Act (IEEPA).

According to analysts at Emkay Global, around 55 percent of India’s exports to the US will now face a 15 percent tariff, while nearly 40 percent, including electronics, pharmaceuticals and petroleum products will remain exempt. As a result, India’s effective tariff rate is expected to be in the 11–13 percent range, which is lower than China’s, estimated to be above 15 percent. Most other Asian countries are likely to face similar tariff levels as India.

“We think the deal will be renegotiated to make it more balanced, and India is now under less pressure to make large trade concessions," analysts said.

Nearly every country with a trade deal with the US is now seeing its headline tariff rate move lower or align with agreed levels. Apart from the European Union, Japan and South Korea whose effective tariff rates remain largely unchanged, India stands to benefit, as its tariff burden will be lower than under the earlier interim trade deal with the US.

For competing export hubs such as Bangladesh and Vietnam, the new tariff rates are expected to level the playing field with India over the next 150 days, a period that will be closely watched by exporters and policymakers.

Emkay analysts also said that the US’s use of unilateral tariffs as a bargaining tool has eased for now. This reduces pressure on countries to accept tough trade terms, such as large investment commitments, easing of non-tariff barriers. However, countries are likely to remain cautious, balancing the risk of upsetting the Trump administration against the need to protect their own interests.

Meanwhile, Deven Choksey, Promoter, KRChoksey Group, said India exports goods worth $75–80 billion a year to the US, and even a small reduction in tariffs could lead to meaningful savings.

He also highlighted the refund angle, which could offer quick liquidity support.

“Since the earlier tariffs have been declared illegal, US importers may become eligible for duty refunds. This could release billions of dollars back into the supply chain, improving near-term cash flows and trade momentum,” Choksey said.

Section 122 tariffs come with a 150-day limit. After that, the key questions will be which tariffs will apply and at what rates. The next five months will therefore be crucial in shaping trade talks and export competitiveness.