No US Trade Deal Could Cost India $5 Billion in Exports to Vietnam, Warn Analysts
India may suffer an export loss of up to $5 billion to Vietnam if it fails to secure a lower-tariff trade agreement with the United States, according to a recent analysis by Moneycontrol. The threat comes on the heels of a newly signed US-Vietnam trade deal, which offers preferential tariffs to Vietnamese exports ahead of a July 9 policy shift by the US.
In 2023, India exported nearly $76 billion worth of goods to the US, out of which $5.4 billion overlapped with Vietnam’s export categories—primarily in frozen shrimp, kitchen and toilet linen, and jewellery. While the overlap is limited in scope, the price-sensitive nature of these sectors makes India’s market share vulnerable to tariff shifts.
The most significant concern is India’s frozen shrimp exports, valued at $1.81 billion in 2023. Vietnam’s share in the same category stood at $290 million, but with new US tariff benefits, India’s market could shrink drastically, potentially resulting in a $1.6 billion loss in this segment alone.
Other high-risk sectors include:
- Kitchen and toilet linen: Potential loss of $280 million
- Jewellery: Possible drop of $231 million
President Donald Trump, in a statement posted on July 2, announced the bilateral trade deal with Vietnam, which reduced export tariffs to 20%. This shields Vietnam from the new 40-46% tariffs imposed under Washington’s updated trade regime. In contrast, India still faces a 26% tariff, unless a similar preferential deal is negotiated.
“It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,” Trump said via his social media account.
At the time of publication, India had not yet reached a new trade agreement with the United States, putting key sectors at a competitive disadvantage as the global trade landscape continues to shift.
