India's Trade Deals with the EU and the US Deal a Blow to Pakistan

04-Feb-2026 06:07 PM

New Delhi. India has dealt a severe blow to Pakistan by signing bilateral trade agreements with the European Union and then with the United States. India had previously also signed a trade agreement with the UK.

The US has announced a reduction in import duties on Indian products to 18 percent, while a 19 percent tariff will remain in effect on Pakistani products.

This will make Indian rice (especially Basmati) and textile products more competitive in the American market, increasing the difficulties for Pakistani exporters.

The chairman of the Pakistani Cotton Ginners Forum has stated that if the government does not take necessary measures to protect the interests of the cotton and textile industry as soon as possible, there is a strong possibility of a sharp decline in Pakistani exports.

Pakistan also exports a significant amount of rice to the European Union and the US, and its exporters had been benefiting from tariff exemptions, which had been causing difficulties for Indian exporters. However, this situation will now change.

In the coming years, it is likely that Pakistani exporters, rather than Indian ones, will face increased difficulties.

It is noteworthy that the cotton and rice industries are of paramount importance to the Pakistani economy because they are the largest source of foreign exchange earnings.

If exports of textiles and rice face a crisis, Pakistan's economic situation could become extremely weak.

There is now an emphasis in Pakistan on reducing production costs to bring them in line with India's, but the government's financial situation is not strong enough to provide subsidies to farmers for fertilizers, seeds, and other agricultural inputs.