India-US Trade Deal Threatens $2.6 Billion South Asian Exports to US Market

• A new India-US trade deal could jeopardize $2.6 billion worth of South Asian exports to the United States, as India gains a significant tariff advantage.
• Pakistan, Sri Lanka, and Bangladesh risk losing competitiveness in over a tenth of their US exports in product categories where India is a strong competitor.
• The deal, announced by US President Donald Trump, cut reciprocal tariffs to 18% from 50%, significantly lowering India's effective tariff to 10.7%.
• This new tariff rate is considerably lower than Bangladesh's (19.9%), Sri Lanka's (19.1%), and Pakistan's (18.2%), making India more competitive.
• South Asian economies, particularly Bangladesh (garments, home textiles), Pakistan (bed linen, cotton products), and Sri Lanka (apparel, rubber goods), are highly exposed due to direct competition in labor-intensive sectors.