Trump admin reduces tariff on India from 12.5% to 10% under Section 301 probe
UPSC / SSC current affairs note · Economy
Why in news
The US Trump administration announced a fresh set of tariffs under Section 301, reducing India's rate from 12.5% to 10%, effective immediately. This comes as temporary 10% duties under Section 122 expired on July 24, 2026. The revised tariffs impact 60 economies, with India among 17 nations receiving the lower rate.
Background
Section 301 of the US Trade Act allows investigation and tariffs on imports made using forced labour. The US had initiated a probe into 60 economies, initially proposing a 12.5% tariff on India. The new rate of 10% also applies to Bangladesh, Pakistan, Canada, and the UK.
Key facts
US Trade Representative Jamieson Greer announced revised tariffs on 60 economies on July 24, 2026.
India's tariff rate reduced from proposed 12.5% to 10% under Section 301 probe.
The 10% rate applies to 16 other economies including Bangladesh, Pakistan, Canada, and the UK.
Countries without legal provisions banning forced labour imports (e.g., China, Japan) face 12.5% tariff.
Exemptions include raw materials, agricultural inputs not adequately produced in US, products causing inflation or supply chain disruption, certain industrial inputs, Section 232-covered goods, and humanitarian items.
The new tariffs are effective immediately, replacing temporary 10% duties under Section 122 that expired on July 24.
Section 301 targets goods made using forced labour as defined by the US.
Prelims pointers
- Section 301 of the US Trade Act of 1974
- Section 122 of the US Trade Act
- US Trade Representative Jamieson Greer
- Tariff rate: India 10%, others 12.5%
- 60 economies under probe
- Exemptions: raw materials, agricultural inputs, industrial inputs, medical supplies, humanitarian items
Mains angles
- Impact of US tariff policy on India-US trade relations
- Analysis of forced labour provisions in international trade law
- Effect on Indian exports and sectors like textiles, pharmaceuticals
- Comparison with other countries' tariff treatment and strategic implications