WASHINGTON D.C. – The United States has enacted an additional 10% ad valorem duty on a significant portion of imports from India, impacting roughly 55% of the South Asian nation's exports to the U.S. This tariff, imposed under Section 301, was scaled down from an initially proposed 12.5%, which remains applicable to 43 other countries.
Ministry of Commerce officials confirmed that while 55% of India's exports now face this additional levy, approximately 45% remain exempt. This development underscores the ongoing trade complexities between the two nations.
India's Proactive Trade Strategy
In response to these tariffs and to bolster its economic resilience, India is intensifying efforts to broaden and deepen its international trade relationships. The nation is actively engaged in a series of free trade agreement (FTA) negotiations and other market-access initiatives worldwide.
- Canada: The third round of negotiations for the India-Canada Comprehensive Economic Partnership Agreement (CEPA) concluded in Ottawa from July 6-10, 2026.
- ASEAN: The 13th ASEAN-India Trade in Goods Agreement (AITIGA) Joint Committee met during the same period to advance its review and expand market access.
- Israel: India and Israel held their second round of FTA negotiations in New Delhi from July 20-23.
- Maldives: The first round of India-Maldives FTA negotiations was conducted virtually from July 28-31.
- Taiwan: India also conducted a bilateral engagement meeting with Taiwan, signaling broader economic engagement in the region.
Government officials emphasized that these negotiations aim to forge “balanced, comprehensive, and mutually beneficial agreements” that will boost bilateral trade, enhance market access, promote investment flows, and deepen long-term economic cooperation.
Expanding Market Access and Regional Trade
Beyond FTAs, India is also focusing on strengthening regional trade and improving market access for its exporters.
- Nathu La Pass: A significant step for border trade was the reopening of the Nathu La Pass, which had been closed for approximately six years due to the COVID-19 pandemic. This marks a crucial development for economic activity in India's Northeast.
- European Union: India is actively working to enhance its trade and economic ties with the EU. The third India-EU Trade and Technology Council meeting took place in Brussels on July 15, covering discussions on trade, technology, security, innovation, and strategic cooperation.
Recent measures have also improved Indian exporters' access to the EU market. The EU approved 21 additional Indian fishery establishments for exports, bringing the total to 123. This is expected to significantly boost market access for Indian seafood, including aquaculture shrimp and cephalopods.
Furthermore, two Indian ship-recycling facilities, YSI Recycling Services LLP and Shree Ram Vessel Scrap Pvt Ltd, were added to the European List of Ship Recycling Facilities by the European Commission. This could position India as the first non-OECD country with shipyards listed by the EU, highlighting its growing adherence to international environmental and safety standards in the industry.
India continues to engage with U.S. authorities to resolve outstanding trade issues and is working towards the early conclusion of an India-US Bilateral Trade Agreement (BTA).