India’s tariff edge puts Bangladesh, Pakistan textiles and ASEAN food exports under pressure in US market

Textiles emerge as the most vulnerable segment for Bangladesh and Pakistan

• India gains lower US tariffs, boosting competition in textiles and food sectors.
• Indian exporters pose a growing threat to Bangladesh and Pakistan's textile exports.
• India's tariff advantage may increase competition for Southeast Asian food exports.

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Textile exporters in Bangladesh and Pakistan, as well as food producers in Thailand, Indonesia and Vietnam, could face stiffer competition in the US market after India secured lower tariffs than most South and Southeast Asian peers.

Following the announcement of the trade deal by US President Donald Trump and Prime Minister Narendra Modi on February 2, India’s tariff rate was set at 18 percent. That compares with 20 percent for Bangladesh, 19 percent for Pakistan, 20 percent for Vietnam, and 19 percent each for Thailand, Indonesia and Malaysia. Sri Lanka is also at 20 percent.

Textiles most exposed

Textiles emerge as the most vulnerable segment for Bangladesh and Pakistan. Bangladesh’s exposure is concentrated in knitted and non-knitted apparel. Key categories include women’s cotton skirts ($41.8 million), men’s shirts ($37 million), and women’s nightdresses and pyjamas ($22.9 million).

Pakistan’s exposure is even more heavily skewed toward textiles and made-ups. Cotton sweaters and pullovers alone account for $432.2 million of exports to the US, while printed cotton bed linen totals $137.4 million and man-made fibre bed linen $40.8 million.

Taken together, Indian exporters could threaten around 2 percent of Bangladesh’s US exports in categories where Bangladesh’s shipments were less than 30 percent higher than India’s in 2024. For Pakistan, the exposure is significantly larger—about 15 percent, or nearly $636 million of exports across categories.

The analysis considers only product lines where competing countries’ exports were at most 30 percent higher than India’s, and excludes segments where Indian exporters already shipped more to the US.

Food and seafood pressure in Southeast Asia

In Southeast Asia, food and seafood exports are the primary pressure points. Vietnam’s prepared and preserved shrimps and prawns form the single largest exposed category at $410.6 million, closely followed by Indonesia’s shrimp exports at $405.3 million. Thailand faces exposure in processed fish exports worth $56.0 million, in addition to shrimps in airtight packaging at $40.4 million.

With India’s tariff edge and scale in seafood processing, these categories are likely to see more aggressive bidding competition in the US market.

Vietnam may also face pressure in non-food segments such as electrical plugs and sockets, a $98 million category, and semi-precious stones, where exports stood at $44 million.

Overall, Southeast Asia’s exposure remains relatively limited. Vietnam’s affected exports amount to about 2.2 percent of its US shipments, while Thailand faces a similar exposure of 2.2 percent, including competition in rubber and plastic articles. Sri Lanka stands out with the highest relative exposure at around 18 percent.