How Does the US Cutting Tariffs to 18% Change India’s Standing Against China and Other Export Rivals?

The United States has sharply reduced tariffs on Indian exports to 18%, down from an effective rate of nearly 50%, marking a major shift in trade relations between the two countries. The move, announced by US President Donald Trump, is expected to make Indian goods significantly cheaper and more competitive in the American market.Earlier, Indian exports to the US were subject to a 25% reciprocal tariff along with an additional 25% penalty imposed by Washington over New Delhi’s continued purchase of Russian crude oil. The revised tariff regime removes that burden, easing pressure on Indian exporters across sectors.In return, Trump said India has agreed to reduce tariff and non-tariff barriers on US goods to zero, though New Delhi has not yet

released detailed terms of the agreement.India’s Position Improves GloballyWith the new tariff structure, India now enjoys a more favourable position compared to several major exporters to the US. Countries such as China, Pakistan, Bangladesh, Indonesia and Vietnam continue to face higher import duties, giving Indian products a relative price advantage.According to the White House, Brazil faces the steepest US tariff at 50%, followed by Myanmar and Laos at 40% each, China at 37%, and South Africa at 30%. In contrast, India’s 18% rate places it well below many emerging-market peers.Among Southeast Asian exporters, Bangladesh and Vietnam face tariffs of 20%, while Malaysia, Cambodia, Thailand and Pakistan are at 19%, all higher than India’s new rate.READ HERE: India-US Trade Deal News Live UpdatesDeveloped economies continue to enjoy preferential treatment, with the European Union, Japan, South Korea and Switzerland facing tariffs of around 15%, while the United Kingdom has the lowest rate at 10%.Countries and US Tariff Rates (Post India–US Deal)

• India: 18% (reduced from ~50%)
• United Kingdom: 10%
• European Union: 15%
• Japan: 15%
• South Korea: 15%
• Switzerland: 15%

Emerging & Developing Economies

• Brazil: 50% (highest)
• Myanmar: 40%
• Laos: 40%
• China: 37%
• South Africa: 30%

Southeast & South Asian Peers

• Bangladesh: 20%
• Vietnam: 20%
• Malaysia: 19%
• Cambodia: 19%
• Thailand: 19%
• Pakistan: 19%
• Indonesia: Higher than India (exact rate not specified)

India now enjoys a tariff advantage over most Asian peers and several major exporters, though developed economies still retain preferential access.Leaders ReactFollowing a phone conversation with Prime Minister Narendra Modi, Trump wrote on Truth Social that discussions covered trade and geopolitical issues, including Russia and Ukraine. He claimed India had agreed to stop buying Russian oil and increase purchases from the US and possibly Venezuela.Prime Minister Modi welcomed the tariff cut but did not reference any change in India’s stance on Russian oil imports. “Delighted that Made in India products will now have a reduced tariff of 18%,” he wrote on X, thanking Trump for the announcement.Russian Oil Remains a Key FactorIndia remains one of Russia’s largest crude oil buyers, importing roughly 1.5 million barrels per day. Data from Kpler shows Russian oil accounts for over one-third of India’s total crude imports, underlining why energy considerations remain central to New Delhi’s trade and foreign policy calculations.While the tariff cut is widely seen as a boost for Indian exporters, clarity on the full scope of commitments—especially on energy and market access—will determine the long-term impact of the deal.