Trump’s 50% Tariffs on India: Pakistan’s Big Break

Paris (Imran Y. CHOUDHRY) :- Former Press Secretary to the President, Former Press Minister to the Embassy of Pakistan to France, Former MD, SRBC Mr. Qamar Bashir analysis : During the Biden administration, India was elevated from an ordinary bilateral trade partner to a “strategic partner” and “most favored nation” in Washington’s eyes. The U.S. envisioned India as a counterweight to China’s growing influence, pouring political, economic, and strategic support into New Delhi. India was projected as the next global manufacturing hub, with U.S. industries encouraged to set up production plants there and bring their goods back to America, giving India unprecedented access to U.S. markets and raising its global profile. However, this sudden rise inflated India’s ego, making it more assertive and, at times, confrontational—not only with its neighbors like Pakistan and Nepal but also with China and even Western partners.
Confident of Washington’s protection, India began flexing its muscles globally. Its defiance became clear during disputes with the European Union and the U.S., especially after the Ukraine war began. Despite India bypassing sanctions, buying discounted Russian oil, and reselling refined products at a profit, the Biden administration imposed no penalties. For Biden, the calculus was strategic: build India’s economy, enhance its military strength, and position it as a democratic bulwark against China in the Indo-Pacific. Even when India refused to align with Western sanctions on Russia, the administration remained lenient, prioritizing long-term objectives over immediate disagreements.
This approach shifted dramatically with Donald Trump’s return to the White House in January 2025. Viewing U.S.–India relations through a transactional lens, Trump rejected the idea of indulging India unconditionally. He saw India’s growing trade surplus, hidden tariff barriers, and its lucrative energy trade with Russia as a fundamental imbalance. Within months, Trump reversed nearly all the privileges extended under Biden and demanded that India halt Russian oil imports, stop reselling petroleum products to the U.S. and Europe at inflated prices, and lower its exorbitant tariffs on American goods. India refused, defending its “strategic autonomy” and rejecting Washington’s demands outright.
Trump’s response was swift and uncompromising. Starting with a 10% tariff on Indian goods, he escalated it to 15%, then 35%, and finally imposed a sweeping 50% blanket tariff by August 27, 2025. This single policy move crippled India’s position in the U.S. market, rendering billions of dollars’ worth of exports uncompetitive. Indian goods worth $48 to $58 billion annually—including textiles, apparel, seafood, gems, jewelry, furniture, machinery, and metals—became prohibitively expensive. Analysts estimate India could lose up to 43% of its U.S. exports, nearly $40 billion annually, hitting its manufacturing and employment sectors hard. These tariffs marked a decisive recalibration of U.S. policy, reducing India from a privileged strategic partner back to a transactional trading ally.
While the rift between Washington and New Delhi has damaged India’s position, it has created a historic opening for Pakistan. With India’s access to U.S. supply chains disrupted, Pakistan is uniquely positioned to fill the gap. In 2024, Pakistan’s total trade with the U.S. stood at $7.2 billion, with exports accounting for $5.1 billion and growing steadily. By fiscal year 2024–25, exports to the U.S. rose further to $5.83 billion, driven by textiles, apparel, leather products, surgical instruments, and home furnishings. Now, as U.S. buyers seek alternatives to Indian suppliers, Pakistan’s competitive advantages—cheaper costs, quality production, and reliability—make it a natural beneficiary.
Adding to Pakistan’s momentum is the July 2025 Pakistan–U.S. Trade and Energy Deal, signed just weeks before Trump’s final tariff decision. This landmark agreement reduced tariffs on key Pakistani exports, including textiles, leather goods, surgical instruments, agricultural products, and IT services, giving Pakistan a clear pricing edge over India. The deal also paved the way for U.S. investment in Pakistan’s energy sector while strengthening bilateral trade ties. In return, Pakistan aligned closely with U.S. policy objectives, including observing restrictions on Russian oil imports and enhancing counterterrorism cooperation. Pleased with Pakistan’s support, Trump publicly praised Islamabad’s contributions to regional stability, especially its assistance in capturing high-profile terrorists and facilitating U.S. intelligence operations.
Pakistan’s diplomatic prudence has further strengthened its standing in Washington. Unlike India, which openly defied U.S. requests while doubling down on Russian oil imports—reportedly worth $34 billion annually—Pakistan avoided any actions that could conflict with Western sanctions. Its neutral stance on energy, combined with extensive cooperation on security, made it a more trusted partner in the region. The growing relationship was symbolized by an unprecedented White House meeting between President Trump and Pakistan’s Army Chief, Field Marshal Asim Munir, signaling elevated strategic confidence.
The implications of these developments are profound. With Indian products now priced out of the American market, billions of dollars’ worth of trade opportunities have opened across multiple sectors—especially textiles, jewelry, seafood, furniture, and machinery. Pakistan can capitalize on this shift by rapidly mobilizing its industrial base, investing in capacity expansion, and ensuring supply chain efficiency. By targeting these sectors and aggressively marketing its competitive advantages, Pakistan could capture a significant share of the U.S. market previously dominated by India.
This moment calls for a coordinated national effort. The government must work with exporters, industry leaders, and the Pakistani diaspora in the U.S. to identify priority sectors and align strategies for substitution. Incentives for new investments in high-demand industries, compliance with international quality standards, and guaranteed reliability in fulfilling large-scale orders will be critical to success. By filling this gap effectively, Pakistan could double or even triple its exports to the U.S. within a few years, creating a ripple effect across other Western markets, particularly Europe, which often follows U.S. trade patterns.
Time, however, is of the essence. Trade realignments happen quickly, and other regional players like Vietnam, Bangladesh, and Indonesia are also competing to replace India’s share. Pakistan must act decisively to strengthen its production capacity, maintain consistent quality, and streamline export processes. The government’s role in facilitating infrastructure improvements, reducing regulatory bottlenecks, and supporting exporters with favorable policies will determine whether Pakistan can fully exploit this opportunity.
In the broader context, India’s inflated confidence, cultivated during years of indulgence under the Biden administration, has collided with Trump’s economic realism. By challenging India’s trade advantages and energy autonomy, Trump has reshaped the dynamics of South Asian commerce, weakening India’s grip on U.S. markets and opening the door for Pakistan. For Islamabad, this is more than a commercial opportunity—it is a strategic chance to redefine its economic partnership with the United States, expand its global trade profile, and accelerate long-term industrial growth.
The window is open but will not remain so indefinitely. If Pakistan acts with agility, coordination, and vision, it can transform this disruption into a turning point for its economy, positioning itself as the primary South Asian beneficiary of U.S. trade and reshaping regional economic dynamics for years to come.