Current US tariff policies are dealing a substantial blow to South Asian economies, with India and Pakistan bearing the brunt. While new, reciprocal tariffs have caused billions of dollars in capital outflows from India, they have eroded Pakistan’s price advantage in the US, says a recent report.
The report prepared by the South Asian Chamber of Commerce and Industry and the South Asian Federation of Accountants estimates that Pakistan’s exports to the US could drop by 30 per cent. India’s exports are likely to plunge up to 40pc. It underlines that South Asia has faced disproportionate consequences due to its reliance on US markets for labour-intensive exports, notably textiles, garments and manufactured goods.
In April, the US imposed a 10pc base tariff on all imports, followed by an additional 11–50pc country-specific surcharge on South Asian nations. Additional US tariffs on Pakistani goods were initially set at 29pc before being reduced to 19pc, but even this level places disproportionate pressure on Pakistan’s labour-intensive export industries. The report estimates that US tariff measures could cost Pakistan around $0.5 billion in annual export revenues and strain the current account.
