US Imposes 10% Additional Tariff On India, But 45% Of Exports Remain Exempt

Around 45% of India's exports to the United States will remain outside the scope of the additional 10% tariff imposed under the final US Section 301 measures, while the proposed textile-specific mechanism has not yet been established, the Commerce Ministry said on Friday.

The remaining 55% of India's exports to the US will attract the additional duty. However, the ministry said India's overall tariff incidence remains lower than that of most other economies covered under the investigation.

The Office of the United States Trade Representative (USTR) announced the final measures on July 23, concluding its Section 301 investigation into the acts, policies and practices of 60 economies, including India, relating to the prohibition and enforcement of imports produced with forced labour.

Under the final measures, the US has imposed an additional 10% ad valorem duty on imports from India, lower than the 12.5% tariff proposed on June 2.

The Commerce Ministry said the reduction followed sustained engagement with the USTR through detailed written submissions, in-person consultations and participation in public hearings. As a result, India has been placed in the lower tier of additional tariffs, giving its exports a relative advantage in several sectors.

Key Exports Remain Outside Tariff Scope

According to the ministry, generic pharmaceuticals, smartphones and certain other specified products that currently attract zero additional duties will continue to remain outside the scope of the new tariff.

Products already covered under Section 232 measures, including steel, aluminium and auto parts, are also exempt from the additional Section 301 duty, as Section 232 tariffs apply across countries with limited exceptions.

On textiles, the ministry said the textile-specific mechanism referred to in the final US measures is yet to be established and operationalised.

Talks On Bilateral Trade Agreement Continue

The ministry said India continues to engage with the United States on the issue as part of the ongoing negotiations for the proposed India-US Bilateral Trade Agreement (BTA).

It added that the government remains committed to working with the United States for the early conclusion of the trade pact, in line with the announcement made on February 2, 2026, and the Joint Statement issued on February 7, 2026.