WASHINGTON: Pakistan and other South Asian countries are closely monitoring the imminent US-India trade agreement, now in its final stages, to gauge how it might influence Washington’s broader trade relations with the region, according to diplomatic sources.
US and Indian officials have indicated that the deal is expected to be finalized by the end of November, potentially allowing bilateral trade to reach $500 billion by 2030.
“Pakistan and other South Asian nations are hoping the agreement will also encourage the United States to expand trade with the rest of the region,” one diplomatic source said. “They are looking for even-handed treatment for all.”
According to sources, these regional concerns are partly responsible for delays in issuing a joint US-Pakistan statement on bilateral trade. Diplomatic sources said Pakistan continues talks with the office of the US Trade Representative as both sides work to finalize details.
Pakistani officials are particularly interested in how they might benefit from provisions such as reduced tariffs on goods made with US raw materials, including fabrics produced from American cotton.
“But now, Pakistanis are no longer pushing for an immediate announcement. Instead, they are waiting for the US-India deal to be finalised,” one source said.
When Finance Minister Muhammad Aurangzeb visited Washington in October for the IMF and World Bank annual meetings, Pakistani officials told reporters the statement would be announced “in weeks, if not days.”
The US-Pakistan trade deal, agreed in principle in July 2025, came into effect on Aug 7. It features reciprocal tariff reductions, particularly benefiting Pakistani exports such as textiles, leather goods, surgical instruments, and agricultural products, while Pakistan removed its digital services tax.
Earlier, on Aug 1, Pakistan announced that the US had imposed a 19 percent tariff on its exports down from the 29 percent rate announced by President Donald Trump in April. Islamabad described the revised rate as a “balanced and forward-looking step” to improve Pakistan’s competitiveness in the US market.
By contrast, India initially faced a 26 percent “reciprocal” tariff on April 9, which was later raised to 50 percent by executive order on Aug 6, effective Aug 27, citing India’s purchases of Russian oil.
The Peterson Institute for International Economics (PIIE) in Washington warns that the 2025 reciprocal tariffs could reduce both US and global economic growth while raising inflation in affected economies. The tariffs disproportionately impact countries reliant on global value chains because duties are applied to gross export value, including imported inputs.
Another Washington think tank, CSIS, notes that the “reciprocal” label is misleading: the rates are calculated using a formula based on the US trade deficit with each country, resulting in rates as high as 50 percent, far exceeding simple tit-for-tat adjustments.
