US tariff structure may give India edge over China, Canada, Mexico: NITI Aayog

The evolving US trade and tariff structure provides a tariff advantage to India over competitors, such as China, Canada and Mexico, in sectors such as textiles, electrically and vehicles, according to reactors, a Niti Aayog report. “In the current US tariff regime, at the HS 2 level, India is expected to gain competitiveness in 22 of the top 30 product categories, covering 61 per cent of its exports to the US and representing 68 per cent of total US imports,” per the third edition of the “Trade Watch Quarterly” publication for Q3 of FY25.India’s relative tariff advantage vis-à-vis major competitors presents a strategic window to expand market share in the US market, especially in sectors such as pharmaceuticals, textiles, and electrical machinery, among others, it said. “The evolving global trade environment demands agile policymaking to capitalise on new trade alignments,” the report noted. In sectors where India does face slightly higher tariffs (6 out of top 30 HS 2 categories), the average tariff disadvantage is only 1 per cent, suggesting India remains broadly competitive, the report said. India has opportunities in both high value sectors, such as electronics and nuclear reactors, and labour-intensive goods. Such as apparel and textiles, due to realigned US tariffs on competitors. The assumptions for the analysis takes into account a 10 per cent additional baseline tariff on imports imposed by the US on all countries, except Mexico and Canada .Imports from Mexico and Canada are subject to a higher tariff of 25 per cent and 35 per cent respectively, while imports from China face an additional higher tariff of 30 per cent, the report noted.