📈 US-India Trade Deal: Impacts for Sri Lankan Exports

US President Donald Trump has announced a significant trade pact with India, slashing tariffs on Indian goods from 50% to 18%. This move follows India’s agreement to halt Russian oil purchases and eliminate trade barriers against US products to zero. • Overall Figures & Trade Impact US tariffs on India reduced to 18% (from a high of 50%, which included a 25% "reciprocal" rate and a 25% punitive duty). India to purchase over US$ 500 Bn in US energy (coal and oil), technology, and agricultural products. Indian equity markets responded positively: Infosys (+4.3%), Wipro (+6.8%), and HDFC Bank (+4.4%). • Regional Competitiveness & Sri Lanka At 18%, India now holds a tariff advantage over Sri Lanka, which faces a 20% to 30% tariff rate on exports to the US. This narrowing margin poses a competitive threat to Sri Lanka’s apparel & textiles sector, as US buyers may pivot to lower-tariff Indian suppliers. The deal brings India in line with Asian peers (15%-19% range), removing a long-standing drag on the Indian Rupee. • Energy & Sector Shifts India will shift crude oil sourcing to the US and potentially Venezuela to replace Russian supplies. Highlights potential growth for India’s ICT/BPM and manufacturing sectors due to lower entry costs into the US market. Sri Lankan exporters, particularly in apparel, are urged by industry bodies (like JAAF) to seek similar diplomatic concessions to maintain market share. _Note: Summary based on provisional data; formal US presidential proclamation is pending._