Kolkata: The 10% tariff that the Donald Trump administration has imposed on India will be applicable on a significant amount of imports the US does from this country, the Union commerce ministry has said. The share of Indian exports that will remain outside the purview of this 10% Section 301 tariff (the US Trade Act, 1974) is as much as 45% of what India exported in FY26, it said. Of these some attract zero tariff now and will continue to do so, while some other items come under another slab higher than 10%, which are applicable almost without exception on all trading partners by the US.
The Centre said a significant share of India’s exports to the US, which was worth as much as $87.31 billion in FY26, will attract to zero duty as they used to do before this new tariff. These include items such as generic pharmaceuticals, smartphones and certain other specified products. However, it must be noted that Trump has said that generic pharma will continue to attract zero duty for another two years, following which they will attract 100% and from the subsequent year, they will be slapped with 200% tariff.
Apart from these with zero tariff, there will be a class of goods which attract tariff far higher than 10%. These are items such as steel, aluminium and auto parts. These products account for 8% of Indian exports to the US and these attract duties ranging from 25% to 50% in addition to the normal US most favoured nation duty. These are items covered under Section 232, which are applicable broadly to all countries with very few exceptions, according to think tank GTRI.
“On account of these exemptions, an estimated 45 per cent of India’s exports to the US remain outside the purview of the additional 10 per cent Section 301 duty,” the ministry said. The 10% tariff will, therefore, be applicable to 55% of Indian exports to the US.
The US initially placed India in the higher bracket of 12.5%. The commerce ministry said the Centre was engaged with USTR throughout the trade investigation in all forms from written submissions and in-person consultations, as well as attending 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.
The government has said that the meaning of the additional 10% tariff means the latest tariffs will be imposed over and above the existing duties, which are so known as the Most Favoured Nation or MFN duty. The sum and substance of this tariff is, if an item attracts 8% MFN tariff, it will now attract a 8% + 10% or 18% tariff.
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Avijit Ghosal has been writing on topics of business, industry and investment for the past three decades. He also writes on the broad economy, infrastructure and issues in banking. He has worked for economic dailies such as the Business Standard, The Economic Times, business magazines such as Business Today, English broadsheet the Hindustan Times and Bengali daily Anandabazar Patrika before joining TV9 Network.