The Global Trade Research Initiative (GTRI) projects that when the new 25% reciprocal tariffs take effect, Indian exports to the US will drop by over 30%, from US $ 86.5 billion in 2024–2025 to roughly US $ 60.6 billion in 2025–2026.
Labour-intensive industries, such as clothing and textiles, are among the most severely impacted, a GTRI analysis released on Monday stated. In contrast to regional competitors like Vietnam, Bangladesh and Mexico, who pay less or no charges, the tariffs seriously harm India, the report said.
The GTRI has suggested a specific five-point action plan that includes financial assistance for MSMEs, real-time trade intelligence, more intelligent use of free trade agreements, tourism reform and simplified onboarding for new exporters in order to lessen the impact and future-proof its trade policy.
India’s exports to the US are subject to a 25% country-specific duty plus an additional, undefined “penalty”—one of the highest among Asian exporters, second only to China at 30%. Conversely, rival nations like Vietnam (20%), Bangladesh (18%), Indonesia, Malaysia and the Philippines (19%), as well as South Korea and Japan (15%), have lower percentages.
The United States currently imposes hefty duties of 38.9% and 35.3% on knitted and woven garments, which are far higher than those imposed on Vietnam, Bangladesh and Cambodia. Made-up textiles like towels and bedsheets, which generate US $ 3 billion in export revenue for India (of which almost half goes to the US), are now subject to a 34% tariff. According to GTRI, this clearly provides rivals like Vietnam and Pakistan an advantage.
