Forty-five per cent of India’s exports remain exempt from new US duty

The government said the US has placed India in the lower 10 per cent tariff bracket under Section 301 measures on forced labour concerns. Around 45 per cent of India's exports remain exempt, while both countries continue negotiations on a bilateral trade agreement

New Delhi: The government on Saturday said the US has kept India in the lower tariff bracket of 10 per cent under its Section 301 measures on alleged forced labour concerns.

The United States Trade Representative (USTR) on July 23 announced the final measures under Section 301 of the US Trade Act, 1974.

---

The measures follow 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 USTR has imposed an additional 10 per cent tariff on imports from India. The US had initially proposed an additional tariff of 12.5 per cent.

India remained closely engaged with the 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 commerce ministry said in a statement.

A substantial share of India’s exports to the United States, which currently attract zero additional duties, such as generic pharmaceuticals, smartphones and certain other specified products, continue to remain outside the scope of the additional 10 per cent duty, it said.

Further, products already covered under Section 232 measures, including steel, aluminium and auto parts, are not subject to the additional 10 per cent duty.

Section 232 duties are applicable broadly to all countries, with limited exceptions.

“On account of these exemptions, an estimated 45 per cent of India’s exports to the United States 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, under which India’s tariff incidence is comparatively lower than that of most other economies covered by the investigation.

It also said the textile-specific mechanism referenced in the final measures is yet to be established and operationalised, and India continues to engage with the US on this matter as part of the ongoing negotiations for the Bilateral Trade Agreement.

“The government remains committed to working with the US towards the early conclusion of the India-US Bilateral Trade Agreement, as announced on February 2, 2026, and in accordance with the Joint Statement issued on February 7, 2026,” it said.