45% of US exports out of Section 301 duty; textile mechanism still pending, says govt

New Delhi: About 45% of India's exports to the US are excluded from the 10% additional tariffs imposed by the latter under its Section 301 measures on alleged forced labour concerns, the government said Saturday.

A textile specific mechanism-referenced in the final measures-is yet to be set up, and New Delhi is continuing to engage with Washington on the issue, as part of ongoing negotiations for a bilateral trade agreement, the commerce and industry ministry said in a statement.

India's exported goods worth $87.3 billion to the US in FY26. "The remaining 55% of exports will attract the additional 10% duty, where India's tariff incidence is comparatively lower than that for most other economies covered by the investigation," the ministry said.


The US Trade Representative (USTR) Thursday announced the final measures under Section 301 of the US Trade Act, 1974 wherein it imposed an additional 10% ad valorem duty on imports from India, lower than the 12.5% duty initially proposed on June 2.

The Indian government remained "closely engaged" with USTR throughout the investigation through detailed written submissions and in-person consultations, including participation in public hearings, per the statement.

"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 ministry said. A substantial share of India's exports to the US, which currently don't attract any additional duties, such as generic pharmaceuticals, smartphones, and certain other specified products, and products already covered under Section 232 measures, including steel, aluminium and auto parts, are not subject to the additional 10% duty. Section 232 duties are applicable broadly to all countries with limited exceptions.

The Gem and Jewellery Export Promotion Council (GJEPC) rejected any implication that India's gem and jewellery sector is linked to forced labour, while highlighting that the 10% tariff provides Indian exporters with a 2.5 percentage-point tariff advantage over several competing manufacturing and trading hubs, including China and Hong Kong, all of which are now subject to a 12.5% additional tariff. However, the new tariff will pose challenges for Indian exporters, particularly as key competing diamond trading centres, such as in the EU and Africa, continue to enjoy duty-free access for natural diamonds, GJEPC said.