The US has cut the proposed additional tariff on Indian imports under Section 301 to 10% from 12.5%. The Commerce Ministry stated that 45% of India’s exports to the US, including pharma and smartphones, are exempt from this new duty.
The United States has reduced the additional tariff on Indian imports under its Section 301 forced labour measures to 10 per cent from the 12.5 per cent proposed earlier, with nearly 45 per cent of India’s exports to the US remaining outside the scope of the new duty, according to the Ministry of Commerce and Industry.
In a statement issued on Saturday, the ministry said the final measures were announced by the Office of the United States Trade Representative (USTR) on July 23 following its investigation into the acts, policies and practices of 60 economies, including India, relating to the prohibition of imports produced with forced labour. The ministry said, “USTR has imposed an additional 10% ad valorem duty on imports from India. This is a reduction from the 12.5% duty initially proposed on 2nd June 2026.”
India’s Engagement Secures Lower Tariff
According to the ministry, India’s continued engagement with the US during the investigation helped secure a lower tariff category compared with many other economies. “The Government of India remained closely engaged with USTR throughout the investigation through detailed written submissions and in-person consultations, including 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 statement said.
Major Export Categories Unaffected
The ministry said several major export categories would remain unaffected by the additional tariff. It noted that generic pharmaceuticals, smartphones and certain other specified products continue to attract no additional duty under the Section 301 action. Products already covered under Section 232 measures, including steel, aluminium and auto parts, are also excluded from the new 10 per cent duty. “On account of these exemptions, an estimated 45% of India’s exports to the United States remain outside the purview of the additional 10% Section 301 duty. The remaining 55% of exports will attract the additional 10% duty, where India’s tariff incidence is comparatively lower than that for most other economies covered by the investigation,” the ministry said.
Status of Textile Sector
On textiles, the ministry said the sector-specific mechanism referred to in the final US measures has not yet been operationalised. “The textile-specific mechanism referenced in the final measures is yet to be established and operationalised. India continues to engage with the U.S. on this matter as part of the ongoing negotiations for the India-U.S. Bilateral Trade Agreement,” it said.
Future of India-US Trade Pact
The ministry added that India would continue working towards an early conclusion of the proposed bilateral trade pact with the United States. “The Government remains committed to working with the United States towards the early conclusion of the India-U.S. Bilateral Trade Agreement,” the statement said. (ANI)
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