India in lower tariff tier in US Section 301 measures, committed to early trade pact conclusion: Govt
New Delhi, July 25
The government remained closely engaged with the United States Trade Representative throughout the Section 301 investigation over forced labour and 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, an official statement said on Saturday.
The government said it remains committed to working with the United States towards the early conclusion of the India-US Bilateral Trade Agreement (BTA).
The USTR, on July 23, announced the final measures under Section 301 of the US Trade Act, 1974.
The measures follow 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 ad valorem duty on imports from India. This is a reduction from the 12.5 per cent duty initially proposed on June 2, 2026.
"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," said the Ministry of Commerce and Industry 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.
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 remaining 55 per cent of exports will attract the additional 10 per cent duty, where India's tariff incidence is comparatively lower than that for most other economies covered by the investigation, the ministry informed.
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.
— IANS
Reader Comments
Happy that 45% of our exports are exempted, especially generics and smartphones. But the remaining 55% facing that 10% duty is concerning. 😐 Need more clarity on the textile mechanism – our garment exporters are already struggling.
This seems like a step in the right direction for bilateral trade. India's diplomatic approach is yielding results. The lower tariff tier gives Indian goods a competitive edge over other Asian exporters. Hope the BTA gets finalised soon.
The government says it negotiated well, but why did we even get investigated in the first place? Our labour laws are strict. This feels like another protectionist move by the US. Still, credit where due – they managed to reduce the tariff from proposed level.
Interesting development. India's engagement with USTR through written submissions and hearings clearly helped. The 10% duty is better than 12.5% for sure. But I worry about the impact on small exporters in textiles and leather sectors.
Finally some good news for exports! 🎉 The pharma sector breathes a sigh of relief. But 10% duty on 55% of exports is still significant. Hope the BTA covers this properly. Need more trade diversification to reduce dependency.
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