US puts India in lower 10% tariff tier; $87 billion exports exempt from extra duty
The United States has imposed an additional 10 per cent duty on Indian goods under Section 301 while placing India in the lower tariff bracket. The Centre said exemptions will shield a large share of exports, even as textile exporters flagged concerns during ongoing BTA talks.
The Centre on Saturday said the United States has placed India in the lower 10 per cent tariff bracket under its Section 301 measures on alleged forced labour concerns, describing it as a relative advantage for Indian exports. The government also reaffirmed its commitment to working with Washington for the early conclusion of the India-US Bilateral Trade Agreement (BTA).
The United States Trade Representative (USTR) on July 23 announced the final measures under Section 301 of the US Trade Act, 1974, imposing an additional 10 per cent import duty on Indian goods from July 24. The measures followed the USTR's investigation into the acts, policies and practices of 60 economies, including India, relating to the imposition and enforcement of prohibitions on the importation of goods produced with forced labour.
The US had initially proposed a 12.5 per cent tariff on India. The final 10 per cent duty replaced the earlier temporary 10 per cent tariffs that had been imposed for 150 days from February 24.
Responding to the development, the Commerce Ministry said India remained closely engaged with the USTR throughout the investigation through detailed written submissions, in-person consultations and participation in public hearings.
"As a result of these sustained efforts, India has been placed in the lower tier of additional tariffs under the final measures, providing a relative advantage to Indian exports in key sectors," the ministry said in a statement.
The ministry said a substantial share of India's exports to the US, valued at USD 87.31 billion in 2025-26, will continue to remain outside the scope of the additional 10 per cent duty. These include generic pharmaceuticals, smartphones and certain other specified products that currently attract zero additional duties.
It also clarified that products already covered under Section 232 measures, including steel, aluminium and auto parts, will not attract the additional 10 per cent duty under Section 301. According to think tank GTRI, these products account for about 8 per cent of India's exports and already face tariffs of 25 per cent or 50 per cent in addition to the normal US most favoured nation (MFN) duty. Section 232 sectoral duties apply broadly to all countries with limited exceptions.
"On account of these exemptions, an estimated 45 per cent of India's exports to the US remain outside the purview of the additional 10 per cent Section 301 duty," the ministry said.
The remaining 55 per cent of exports will attract the additional 10 per cent duty, although the government said India's overall tariff incidence remains comparatively lower than that of most other economies covered by the investigation.
"The government remains committed to working with the US towards the early conclusion of the India-US Bilateral Trade Agreement, as announced on 2nd February 2026 and in accordance with the Joint Statement issued on 7th February 2026," the ministry added.
TEXTILE EXPORTERS RAISE CONCERNS
Addressing concerns raised by the textile sector, the ministry said the textile-specific mechanism referenced in the final Section 301 measures has not yet been established or operationalised. It added that India continues to engage with the US on the issue as part of the ongoing BTA negotiations.
Industry experts and exporters have pointed out that India has not received the textile and apparel tariff-rate quota (TRQ) exemption under the new US Section 301 forced labour tariff regime.
The exemption applies to specified volumes of textile and apparel exports from Bangladesh, Cambodia, Indonesia and Malaysia that use US-origin cotton and fibre. The USTR has announced that textile TRQs will be available to these four countries for an initial period of three years.
Under the arrangement, these countries will import US cotton and textile goods for final manufacturing and export to the US at concessional duty rates.
Bangladesh, one of the world's largest textile exporters and a key competitor to India, imports significant quantities of Indian cotton and fibre. However, the new TRQ mechanism could encourage Bangladeshi manufacturers to source more cotton directly from the US.
Expressing serious concern over the additional duty, the Confederation of Indian Textile Industry (CITI) said the new US tariff could also affect exports of intermediate textile products from India to other countries.
The US remains the single-largest market for India's textile and apparel exports, with shipments typically valued at around USD 11 billion annually.
In February, Commerce and Industry Minister Piyush Goyal expressed confidence that India would secure concessional duty access for garments made using American yarn and cotton under the proposed trade agreement with the US, similar to the benefits currently available to Bangladesh.
WHAT THE ADDITIONAL 10% TARIFF MEANS
The additional 10 per cent tariff comes over and above the existing import duties, also known as the MFN duty, applicable to products entering the US market.
For example, if a shirt exported from India currently attracts a 5 per cent import duty in the US, it will now face a total tariff of 15 per cent after the additional 10 per cent levy.
WHY INDIA WAS PLACED IN LOWER 10% BRACKET
The USTR launched two Section 301 investigations in March against several countries, including India, on issues related to forced labour and excess industrial capacity.
In June, the US proposed a 12.5 per cent tariff on 54 countries, including India, for allegedly failing to prohibit imports of goods produced using forced labour. It proposed a 10 per cent duty for six regions, including Pakistan and the European Union.
In July, India amended its Foreign Trade Policy to prohibit the import of goods produced using forced labour. The US took note of the amendment and subsequently imposed the lower 10 per cent duty on India.
PROBE ON EXCESS INDUSTRIAL CAPACITY STILL PENDING
The US has not yet released the findings of its separate Section 301 investigation into excess industrial capacity.
According to GTRI, the Trump administration is expected to announce the outcome of that investigation, which could result in additional tariffs on a wide range of industrial products.
INDIA-US BTA NEGOTIATIONS CONTINUE
India and the US are currently negotiating a bilateral trade agreement and have already finalised a framework deal for the first phase of the pact.
India is seeking comparative and competitive tariff advantages over peer countries as the negotiations move forward.
The Centre on Saturday said the United States has placed India in the lower 10 per cent tariff bracket under its Section 301 measures on alleged forced labour concerns, describing it as a relative advantage for Indian exports. The government also reaffirmed its commitment to working with Washington for the early conclusion of the India-US Bilateral Trade Agreement (BTA).
The United States Trade Representative (USTR) on July 23 announced the final measures under Section 301 of the US Trade Act, 1974, imposing an additional 10 per cent import duty on Indian goods from July 24. The measures followed the USTR's investigation into the acts, policies and practices of 60 economies, including India, relating to the imposition and enforcement of prohibitions on the importation of goods produced with forced labour.
The US had initially proposed a 12.5 per cent tariff on India. The final 10 per cent duty replaced the earlier temporary 10 per cent tariffs that had been imposed for 150 days from February 24.
Responding to the development, the Commerce Ministry said India remained closely engaged with the USTR throughout the investigation through detailed written submissions, in-person consultations and participation in public hearings.
"As a result of these sustained efforts, India has been placed in the lower tier of additional tariffs under the final measures, providing a relative advantage to Indian exports in key sectors," the ministry said in a statement.
The ministry said a substantial share of India's exports to the US, valued at USD 87.31 billion in 2025-26, will continue to remain outside the scope of the additional 10 per cent duty. These include generic pharmaceuticals, smartphones and certain other specified products that currently attract zero additional duties.
It also clarified that products already covered under Section 232 measures, including steel, aluminium and auto parts, will not attract the additional 10 per cent duty under Section 301. According to think tank GTRI, these products account for about 8 per cent of India's exports and already face tariffs of 25 per cent or 50 per cent in addition to the normal US most favoured nation (MFN) duty. Section 232 sectoral duties apply broadly to all countries with limited exceptions.
"On account of these exemptions, an estimated 45 per cent of India's exports to the US remain outside the purview of the additional 10 per cent Section 301 duty," the ministry said.
The remaining 55 per cent of exports will attract the additional 10 per cent duty, although the government said India's overall tariff incidence remains comparatively lower than that of most other economies covered by the investigation.
"The government remains committed to working with the US towards the early conclusion of the India-US Bilateral Trade Agreement, as announced on 2nd February 2026 and in accordance with the Joint Statement issued on 7th February 2026," the ministry added.
TEXTILE EXPORTERS RAISE CONCERNS
Addressing concerns raised by the textile sector, the ministry said the textile-specific mechanism referenced in the final Section 301 measures has not yet been established or operationalised. It added that India continues to engage with the US on the issue as part of the ongoing BTA negotiations.
Industry experts and exporters have pointed out that India has not received the textile and apparel tariff-rate quota (TRQ) exemption under the new US Section 301 forced labour tariff regime.
The exemption applies to specified volumes of textile and apparel exports from Bangladesh, Cambodia, Indonesia and Malaysia that use US-origin cotton and fibre. The USTR has announced that textile TRQs will be available to these four countries for an initial period of three years.
Under the arrangement, these countries will import US cotton and textile goods for final manufacturing and export to the US at concessional duty rates.
Bangladesh, one of the world's largest textile exporters and a key competitor to India, imports significant quantities of Indian cotton and fibre. However, the new TRQ mechanism could encourage Bangladeshi manufacturers to source more cotton directly from the US.
Expressing serious concern over the additional duty, the Confederation of Indian Textile Industry (CITI) said the new US tariff could also affect exports of intermediate textile products from India to other countries.
The US remains the single-largest market for India's textile and apparel exports, with shipments typically valued at around USD 11 billion annually.
In February, Commerce and Industry Minister Piyush Goyal expressed confidence that India would secure concessional duty access for garments made using American yarn and cotton under the proposed trade agreement with the US, similar to the benefits currently available to Bangladesh.
WHAT THE ADDITIONAL 10% TARIFF MEANS
The additional 10 per cent tariff comes over and above the existing import duties, also known as the MFN duty, applicable to products entering the US market.
For example, if a shirt exported from India currently attracts a 5 per cent import duty in the US, it will now face a total tariff of 15 per cent after the additional 10 per cent levy.
WHY INDIA WAS PLACED IN LOWER 10% BRACKET
The USTR launched two Section 301 investigations in March against several countries, including India, on issues related to forced labour and excess industrial capacity.
In June, the US proposed a 12.5 per cent tariff on 54 countries, including India, for allegedly failing to prohibit imports of goods produced using forced labour. It proposed a 10 per cent duty for six regions, including Pakistan and the European Union.
In July, India amended its Foreign Trade Policy to prohibit the import of goods produced using forced labour. The US took note of the amendment and subsequently imposed the lower 10 per cent duty on India.
PROBE ON EXCESS INDUSTRIAL CAPACITY STILL PENDING
The US has not yet released the findings of its separate Section 301 investigation into excess industrial capacity.
According to GTRI, the Trump administration is expected to announce the outcome of that investigation, which could result in additional tariffs on a wide range of industrial products.
INDIA-US BTA NEGOTIATIONS CONTINUE
India and the US are currently negotiating a bilateral trade agreement and have already finalised a framework deal for the first phase of the pact.
India is seeking comparative and competitive tariff advantages over peer countries as the negotiations move forward.
The Centre on Saturday said the United States has placed India in the lower 10 per cent tariff bracket under its Section 301 measures on alleged forced labour concerns, describing it as a relative advantage for Indian exports. The government also reaffirmed its commitment to working with Washington for the early conclusion of the India-US Bilateral Trade Agreement (BTA).
The United States Trade Representative (USTR) on July 23 announced the final measures under Section 301 of the US Trade Act, 1974, imposing an additional 10 per cent import duty on Indian goods from July 24. The measures followed the USTR's investigation into the acts, policies and practices of 60 economies, including India, relating to the imposition and enforcement of prohibitions on the importation of goods produced with forced labour.
The US had initially proposed a 12.5 per cent tariff on India. The final 10 per cent duty replaced the earlier temporary 10 per cent tariffs that had been imposed for 150 days from February 24.
Responding to the development, the Commerce Ministry said India remained closely engaged with the USTR throughout the investigation through detailed written submissions, in-person consultations and participation in public hearings.
"As a result of these sustained efforts, India has been placed in the lower tier of additional tariffs under the final measures, providing a relative advantage to Indian exports in key sectors," the ministry said in a statement.
The ministry said a substantial share of India's exports to the US, valued at USD 87.31 billion in 2025-26, will continue to remain outside the scope of the additional 10 per cent duty. These include generic pharmaceuticals, smartphones and certain other specified products that currently attract zero additional duties.
It also clarified that products already covered under Section 232 measures, including steel, aluminium and auto parts, will not attract the additional 10 per cent duty under Section 301. According to think tank GTRI, these products account for about 8 per cent of India's exports and already face tariffs of 25 per cent or 50 per cent in addition to the normal US most favoured nation (MFN) duty. Section 232 sectoral duties apply broadly to all countries with limited exceptions.
"On account of these exemptions, an estimated 45 per cent of India's exports to the US remain outside the purview of the additional 10 per cent Section 301 duty," the ministry said.
The remaining 55 per cent of exports will attract the additional 10 per cent duty, although the government said India's overall tariff incidence remains comparatively lower than that of most other economies covered by the investigation.
"The government remains committed to working with the US towards the early conclusion of the India-US Bilateral Trade Agreement, as announced on 2nd February 2026 and in accordance with the Joint Statement issued on 7th February 2026," the ministry added.
TEXTILE EXPORTERS RAISE CONCERNS
Addressing concerns raised by the textile sector, the ministry said the textile-specific mechanism referenced in the final Section 301 measures has not yet been established or operationalised. It added that India continues to engage with the US on the issue as part of the ongoing BTA negotiations.
Industry experts and exporters have pointed out that India has not received the textile and apparel tariff-rate quota (TRQ) exemption under the new US Section 301 forced labour tariff regime.
The exemption applies to specified volumes of textile and apparel exports from Bangladesh, Cambodia, Indonesia and Malaysia that use US-origin cotton and fibre. The USTR has announced that textile TRQs will be available to these four countries for an initial period of three years.
Under the arrangement, these countries will import US cotton and textile goods for final manufacturing and export to the US at concessional duty rates.
Bangladesh, one of the world's largest textile exporters and a key competitor to India, imports significant quantities of Indian cotton and fibre. However, the new TRQ mechanism could encourage Bangladeshi manufacturers to source more cotton directly from the US.
Expressing serious concern over the additional duty, the Confederation of Indian Textile Industry (CITI) said the new US tariff could also affect exports of intermediate textile products from India to other countries.
The US remains the single-largest market for India's textile and apparel exports, with shipments typically valued at around USD 11 billion annually.
In February, Commerce and Industry Minister Piyush Goyal expressed confidence that India would secure concessional duty access for garments made using American yarn and cotton under the proposed trade agreement with the US, similar to the benefits currently available to Bangladesh.
WHAT THE ADDITIONAL 10% TARIFF MEANS
The additional 10 per cent tariff comes over and above the existing import duties, also known as the MFN duty, applicable to products entering the US market.
For example, if a shirt exported from India currently attracts a 5 per cent import duty in the US, it will now face a total tariff of 15 per cent after the additional 10 per cent levy.
WHY INDIA WAS PLACED IN LOWER 10% BRACKET
The USTR launched two Section 301 investigations in March against several countries, including India, on issues related to forced labour and excess industrial capacity.
In June, the US proposed a 12.5 per cent tariff on 54 countries, including India, for allegedly failing to prohibit imports of goods produced using forced labour. It proposed a 10 per cent duty for six regions, including Pakistan and the European Union.
In July, India amended its Foreign Trade Policy to prohibit the import of goods produced using forced labour. The US took note of the amendment and subsequently imposed the lower 10 per cent duty on India.
PROBE ON EXCESS INDUSTRIAL CAPACITY STILL PENDING
The US has not yet released the findings of its separate Section 301 investigation into excess industrial capacity.
According to GTRI, the Trump administration is expected to announce the outcome of that investigation, which could result in additional tariffs on a wide range of industrial products.
INDIA-US BTA NEGOTIATIONS CONTINUE
India and the US are currently negotiating a bilateral trade agreement and have already finalised a framework deal for the first phase of the pact.
India is seeking comparative and competitive tariff advantages over peer countries as the negotiations move forward.
