India Gets Lower US Tariff Rate Under Section 301

The United States imposed new Section 301 tariffs on 60 countries on 24 July 2026 under Section 301 of the US Trade Act of 1974. India was placed in the lower 10% additional tariff bracket instead of the initially proposed 12.5% rate, and the tariffs took effect on 25 July 2026.

Section 301 in US Trade Law

Section 301 is a trade remedy provision in the US Trade Act of 1974. It allows the United States Trade Representative to take action against foreign trade practices that are found to be unjustifiable, unreasonable, or discriminatory.

India’s Policy Response and Tariff Outcome

India’s lower tariff rate followed a policy change in June 2026, when the Directorate General of Foreign Trade amended the Foreign Trade Policy to prohibit imports of goods manufactured using forced labour. India is among 17 economies in the 10% bracket, along with Canada, the United Kingdom, Bangladesh, Pakistan, Indonesia, and Mexico. China, Vietnam, Thailand, Japan, and South Korea face the higher 12.5% tariff rate. The United States linked the action to investigations on whether trading partners were preventing the import of goods made using forced labour.

Related Trade Measures and Sectoral Duties

The new Section 301 tariffs replaced temporary 10% global tariffs under Section 122 of the Trade Act, which expired on 24 July 2026. About 70% of India’s exports to the United States will now attract the existing Most-Favoured-Nation tariff plus the 10% Section 301 tariff. Products covered under Section 232, including steel, aluminium, and auto components, continue to face duties of 25% to 50%. Section 232 is a separate US trade provision used for imports linked to national security concerns.

Important Facts for Exams

• Section 301 belongs to the US Trade Act of 1974.
• Section 232 is a separate US trade measure linked to national security.
• Most-Favoured-Nation tariff is the standard customs duty applied to imports from WTO members.
• The Directorate General of Foreign Trade functions under India’s Ministry of Commerce and Industry.

Bilateral Trade Talks and Pending Review

India and the United States are continuing discussions on a Bilateral Trade Agreement. A separate Section 301 investigation into alleged excess manufacturing capacity in countries, including India, remains pending.