Starting July 24, 2026, the United States will allow a 10% global tariff on imports, first imposed under Section 122 of the US Trade Act of 1974, to expire. This development is anticipated to provide significant relief for exporters worldwide, particularly impacting India's trade with the US.
Temporary Tariffs End, Relief for India
The temporary import surcharge of 10% ad valorem was initially announced by then-President Donald Trump in February 2026, shortly after the US Supreme Court had struck down reciprocal tariffs. It was enacted for a period of 150 days, becoming effective on February 24, 2026. Its scheduled expiry on July 24, 2026, at 9:31 am IST marks the end of this specific trade barrier.
For India, this expiration is particularly beneficial. A report by the Global Trade Research Initiative (GTRI) indicates that approximately 92% of India's $87.2 billion merchandise exports to the United States will now revert to the standard World Trade Organization (WTO)-compatible Most-Favoured-Nation (MFN) tariffs. This change is expected to enhance the competitiveness of Indian goods in the American market.
Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), expressed optimism regarding the expiry. "Exporters will now only have to pay the MFN tariff. We expect Indian exports to become more competitive and demand to go up in the US," Sahai stated.
Lingering Uncertainty and New Probes
Despite the immediate relief, a degree of uncertainty persists for exporters. Around 8% of India's exports, including crucial sectors like steel, aluminum, and auto components, remain subject to high national security tariffs under Section 232, with no relief from the current changes.
Moreover, the Office of the US Trade Representative (USTR) has initiated two new investigations under Section 301, targeting several countries including India. These probes concern allegations of forced labor and excess manufacturing capacity. The USTR has already proposed a 12.5% tariff in the forced labor case, signaling potential new trade hurdles. Additionally, the US has announced steep tariffs, up to 200%, on generic medicine imports, adding another layer of complexity for Indian pharmaceutical exporters. As Commerce Secretary Rajesh Agarwal noted, the future of these trade policies ultimately rests with the US government.