India has been placed in the lower 10% tariff bracket under the United States' new Section 301 measures targeting alleged forced labour, according to the Indian government.
The United States Trade Representative (USTR) finalized the classification on July 23, following an investigation in which New Delhi submitted detailed written responses and participated in public hearings.
The 10% additional levy represents a significant cost increase for Indian exporters, particularly in the gems and jewellery sector, which remains highly sensitive to US import duties.
The outcome places India in the same tier as regional competitors including Bangladesh, Sri Lanka, Indonesia, Malaysia, and Pakistan, avoiding the steeper penalties applied to other jurisdictions in the probe.
The 10% additional levy represents a significant cost increase for Indian exporters, particularly in the gems and jewellery sector, which remains highly sensitive to US import duties.
While the lower tier mitigates the worst-case scenario of a higher tariff rate, the measure exacerbates existing margin pressures for firms reliant on the American market.
The repricing of trade costs is likely to flow through to export volumes and profitability in the coming quarters, as companies adjust to the new baseline.