From 50% to 18%: Where other countries stand after India-US trade deal | Who pays more, who pays less

U.S. President Donald Trump (R) and Indian Prime Minister Narendra Modi arrive for a joint press conference in the East Room at the White House on February 13, 2025 in Washington, DC.

India secured a trade deal with the US, reducing tariffs on Indian goods from 50% to 18%. This gives India a competitive edge over major exporters like China and Brazil. Key sectors stand to benefit, boosting Indian manufacturing and exports.

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India’s newly announced trade deal with the United States has reshaped the global tariff landscape, placing New Delhi in a significantly stronger position compared to several major export economies. Following a phone call between Donald Trump and Narendra Modi, Washington confirmed that tariffs on Indian goods will be reduced to 18 percent from the earlier effective rate of 50 percent.

The previous levy included a 25 percent reciprocal tariff and an additional 25 percent punitive duty imposed over India’s imports of Russian crude oil. With the punitive component now withdrawn and the base tariff lowered, India has emerged far better placed than many competing economies exporting to the US market.

Announcing the decision on Truth Social, Trump said, “It was an honor to speak with Prime Minister Modi of India this morning. We spoke about many things, including trade, and ending the war with Russia and Ukraine. He agreed to stop buying Russian oil, and to buy much more from the United States and, potentially, Venezuela.”

He added, “Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a trade deal between the United States and India, whereby the United States will charge a reduced reciprocal tariff, lowering it from 25 per cent to 18 per cent.”

India’s new tariff position

With the revised 18 percent tariff, India now enjoys a clear competitive edge over several major exporters. Countries such as Brazil face US duties of 50 percent, while Myanmar, Laos and Syria are each taxed at 40 percent. China continues to face a steep 37 percent tariff, and South Africa is subject to a 30 percent rate.

Closer to home, Canada and Mexico face tariffs of 25 percent each. Bangladesh and Vietnam remain in the 20 percent bracket, while Malaysia, Cambodia, Thailand and Pakistan are levied at 19 percent. In contrast, only a handful of advanced economies such as the European Union, Japan, South Korea and Switzerland enjoy lower tariffs of 15 percent, while the United Kingdom stands at 10 percent.

Nations that have the lowest tariff agreement with the US include the United Kingdom (10 per cent), the European Union (15 per cent), Switzerland (15 per cent), Japan (15 per cent) and South Korea (15 per cent).

Modi welcomes tariff relief

Prime Minister Modi welcomed the development, calling it a boost for Indian manufacturing and exporters.

“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said in a post on X.

He added that closer cooperation between the two countries would unlock new opportunities, noting that when large economies and the world’s biggest democracies work together, it benefits their people.

Reactions from India

Senior members of the Indian government have described the agreement as a major opening for Indian businesses. Commerce and Industry Minister Piyush Goyal said the deal would create new opportunities for farmers, MSMEs, entrepreneurs and skilled workers, while strengthening the Make in India initiative.

External Affairs Minister S Jaishankar, who is currently in the US, said the agreement would deepen economic ties. “This will create more jobs, spur growth and promote innovation in both economies. It will strengthen ‘Make in India’ endeavors and encourage trusted technology ties,” Jaishankar said.

A clear advantage for Indian exporters

For Indian exporters, the tariff reset comes as a major relief. Sectors such as textiles, garments, seafood, chemicals, engineering goods and gems and jewellery are expected to benefit the most, particularly as many of these industries operate on thin margins where even small tariff changes can determine competitiveness.

Compared to Asian rivals such as China, Bangladesh and Pakistan, India now enjoys a meaningful cost advantage in the US market. Analysts say the new tariff regime could help Indian exporters regain market share and attract greater investment into manufacturing.

While the finer details of the trade arrangement are yet to be formalised, the immediate outcome is clear. In the global tariff hierarchy, India has moved decisively upward, emerging better placed than most competing economies in access to the US market.

List of countries with new tariff rates