45% of India's Exports to the US Fall Outside the New 10% Tariff, Says Commerce Ministry
About 45% of India's exports to the United States remain outside the purview of the new 10% tariff, the government said on Saturday, 25 July 2026. The USTR released the final findings of its forced labour investigation on 23 July, levying a 10% tariff on 17 economies including India; five others — the European Union, Taiwan, Japan, Korea and Switzerland — get a lower effective rate, while the remaining 38 investigated countries face a higher tariff than India. The Ministry of Commerce and Industry said the 10% rate is lower than the 12.5% initially proposed for India, and that sustained engagement with the USTR through written submissions, in-person consultations and public hearings had placed India in the lower tier, giving "a relative advantage to Indian exports in key sectors." A substantial share of India's exports already attracts zero additional duty — including generic pharmaceuticals and smartphones — and goods already covered by Section 232 measures such as steel, aluminium and auto parts are also exempt. India remains engaged with the US on a quota-based system for textile exports.
Key Facts & Details
11 points- 1About 45% of India's exports to the US are outside the new 10% tariff.
- 2The USTR released its final forced-labour findings on 23 July 2026.
- 3A 10% tariff applies to 17 economies including India.
- 4The EU, Taiwan, Japan, Korea and Switzerland get a lower effective rate.
- 5The remaining 38 investigated countries face a higher tariff than India.
- 6The 10% rate is below the 12.5% initially proposed for India.
- 7Generic pharmaceuticals and smartphones already attract zero additional duty.
- 8Goods under Section 232 — steel, aluminium, auto parts — are also outside the new duty.
Deep Dive
- +India engaged the USTR through written submissions, consultations and public hearings.
- +The Ministry said this gave "a relative advantage to Indian exports in key sectors."
- +India remains engaged with the US on a quota-based system for textile exports.
Exam Focus
What share of India's exports to the US falls outside the new 10% forced-labour tariff, and how many economies face that 10% rate?
Exam Relevance & Angle
The exemption share and tiering materially change the tariff picture, and the percentages, tier counts and Section 232 exemption are all precisely testable.
Target Exams
Background & Context
A headline tariff rate rarely applies to a country's whole export basket. Two things reduce the real impact here. First, many goods already enter the US at zero additional duty regardless of the new action. Second, products already hit by Section 232 measures — a separate US provision covering national-security-linked imports such as steel, aluminium and autos — are not taxed twice under the new order. That is why the effective coverage is roughly 55%, not 100%. The tiering matters competitively: because 38 investigated countries face higher rates than India, Indian exporters in overlapping sectors gain relative ground even while paying more than before.
Test Yourself
1 / 2According to the Commerce Ministry, what share of India's exports to the US is outside the new 10% tariff?
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