Nearly 45% of India’s exports to the United States will remain outside the scope of the new 10% tariff imposed by Washington under its Section 301 forced labour measures, the Ministry of Commerce and Industry said on Saturday. The exemption covers several of India’s key export sectors, including generic pharmaceuticals, smartphones and products already subject to separate US trade measures.
The ministry issued the statement after the Office of the United States Trade Representative (USTR) announced the final Section 301 measures. The government said the final outcome leaves a significant share of Indian exports unaffected and places India in a more favourable position than many other economies covered under the investigation.
The Commerce Ministry also said the United States reduced the additional tariff on Indian imports to 10% from the 12.5% proposed in June after months of discussions between Indian officials and the USTR.
“The United States Trade Representative (USTR) announced the final measures under Section 301 of the US Trade Act, 1974, on 23rd July 2026,” the ministry said. It added, “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.”
According to the ministry, India remained closely engaged with the USTR throughout the investigation through written submissions, public hearings and in-person consultations.
The government said these efforts helped India secure placement in the lower tier of additional tariffs, giving Indian exporters a relative advantage over other 59 countries covered by the Section 301 investigation.
Which Indian exports are exempt from new duty?
The Commerce Ministry said several important export categories will continue to avoid the additional 10% tariff. These include generic pharmaceuticals, smartphones and certain other specified products, which already attract zero additional duties under the final US measures.
Products covered under separate Section 232 trade measures, including steel, aluminium and auto parts, will also remain outside the scope of the new Section 301 tariff because those goods are already subject to different US import duties.
Due to these exemptions, the government estimates that around 45% of India’s exports to the United States will not face the new 10% duty.
The remaining 55% of exports will attract the additional tariff. However, the ministry said India’s overall tariff burden remains comparatively lower than that faced by most other economies included in the USTR investigation.
The investigation covered the policies and practices of 60 economies, including India, related to the prohibition of goods allegedly produced using forced labour.
What happens next for India-US trade talks?
The ministry said one important part of the US announcement concerning textiles has not yet taken effect. “The textile specific mechanism referenced in the final measures is yet to be established and operationalised,” the statement read.
India will continue discussions with the United States on this issue as part of the ongoing negotiations for the proposed India-US Bilateral Trade Agreement (BTA).
“The Government remains committed to working with the United States towards the early conclusion of the India-US Bilateral Trade Agreement,” the ministry said. The agreement was first announced on February 2, and both countries reaffirmed their commitment through a joint statement issued on February 7.