45% of India's US exports will avoid new 10% tariff
What's the story
The United States has placed India in a lower tariff bracket of 10% under its Section 301 measures, which are related to forced labor concerns. The move comes as part of the US Trade Representative's (USTR) final measures announced on July 23. According to Indian government data, around 45% of India's exports to the US fall outside this additional duty.
Ongoing discussions
Negotiations ongoing for textile-specific mechanism
The remaining 55% of India's exports to the US will be subject to the 10% additional duty, though India's tariff incidence is lower than that of most other economies under investigation.
The final measures include a textile-specific mechanism that is yet to be established.
India and the US are still negotiating this matter as part of their ongoing talks for a Bilateral Trade Agreement (BTA).
Export details
India's goods exports to US valued at $87.3B
India's goods exports to the US were worth $87.3 billion in FY26.
The USTR's final measures imposed a lower 10% ad valorem duty on imports from India, down from an initially proposed 12.5% duty on June 2, 2026.
The Indian government remained "closely engaged" with the USTR throughout this process through detailed written submissions and in-person consultations including public hearings.
Exemptions
Exemptions and tariff-rate quota concerns
A large part of India's exports to the US, which are currently exempt from additional duties, include generic medicines, smartphones, and other specified items.
These products are not subject to the new 10% duty.
However, India did not receive the textile and apparel tariff-rate quota exemption that was granted to Bangladesh, Cambodia, Indonesia, and Malaysia for specified volumes of their textile and apparel exports using US-origin cotton and fiber.