US Imposes New 10% Tariff on Indian Imports; India Among Lower-Tariff Economies

The United States has imposed a 10% tariff on imports from India under Section 301 of the Trade Act of 1974, citing the need for stronger enforcement against goods produced using forced labour. The new duties will take effect at 12:01 am EDT on Friday, replacing the temporary 10% global tariff that expires at the same time. 

According to the Office of the US Trade Representative (USTR), India qualified for the lower 10% tariff after recent policy changes related to forced labour imports. Earlier, India had been considered for a 12.5% tariff, but discussions between the two countries led to the lower rate. 

Why has the US Imposed the Tariff? 

The tariffs follow investigations conducted under Section 301 of the Trade Act of 1974, which allows the US government to investigate foreign trade practices and impose trade measures if they are found to unfairly burden or restrict US commerce. 

The Trump administration said the move is intended to encourage trading partners to strengthen restrictions on imports made using forced labour. According to the USTR, countries with stronger or improved enforcement measures qualify for a lower tariff, while those with inadequate safeguards face higher duties. 

India Among Countries Facing a 10% Tariff 

India has been placed in the 10% tariff category following recent policy measures aimed at strengthening its approach to forced labour imports. 

Other countries in the same category include: 

Meanwhile, economies assessed to have weaker safeguards will face a 12.5% tariff. Certain products from the European Union, Japan, South Korea, Taiwan and Switzerland will attract tariffs of either 10% or 12.5%, depending on the product. 

Read More: Solar Stocks in Focus: US Tariffs Over 230% Hamper India's Solar Export Opportunities 

Products Exempt from the US Tariff 

The USTR said several products will remain exempt from the new duties, including: 

In addition, goods already in transit before the implementation date will remain exempt until July 28, 2026. 

Section 301 Investigation Expanded 

The USTR has also initiated a separate Section 301 investigation into 16 economies over allegations of overproduction that could affect global prices and US manufacturers. The investigation could result in additional trade measures in the future. 

Conclusion 

The US has introduced a new 10% tariff on Indian imports under Section 301, after determining that India's recent policy changes on forced labour imports qualified it for the lower tariff rate. While several products have been exempted, the move forms part of a broader US trade policy aimed at addressing labour standards and trade practices. 

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