India faces lower tariff rate of 10% as Trump issues proclamation on new levies
Indian goods being imported into US would no longer be subject to 18 per cent tariff under Interim Trade Agreement framework
India will now face a reduced tariff rate of 10 per cent, down from the earlier 18 per cent, after US President Donald Trump imposed a temporary global import duty under an alternative trade law following a setback in the Supreme Court.
The move comes just hours after the Supreme Court struck down the administration’s sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA), ruling that the statute did not authorise the broad duties announced earlier. The verdict was widely seen as a significant check on Trump’s trade strategy.
In response, Trump signed a Proclamation invoking Section 122 of the Trade Act of 1974 to impose a 10 per cent ad valorem import duty on most goods entering the United States for a period of 150 days. The levy will take effect from February 24 at 12.01 am Eastern Standard Time.
Under the new order, India -- which had faced tariffs of up to 18 per cent under the earlier framework -- will now be subject to the uniform 10 per cent duty, unless specific product exemptions apply.
According to a White House fact sheet, the temporary duty is aimed at addressing what the administration described as “fundamental international payment problems,” including a widening balance-of-payments deficit and a record goods trade deficit of $1.2 trillion in 2024.
The administration argued that increasing import duties would help stem the outflow of US dollars, incentivise domestic production and strengthen economic and national security.
Certain categories of goods have been exempted from the temporary import duty. These include critical minerals, energy products, select agricultural commodities, pharmaceuticals, specific electronics, aerospace products and informational materials such as books.
Goods already subject to Section 232 tariffs, USMCA-compliant products from Canada and Mexico, and specified textile and apparel items under the Dominican Republic-Central America Free Trade Agreement are also excluded.
In a separate executive order, Trump reaffirmed the suspension of duty-free de minimis treatment for low-value shipments, making such goods subject to the temporary import duty as well.
The White House maintained that the Supreme Court’s ruling would not deter the administration’s broader trade agenda. It reiterated that tariffs remain a central policy tool to encourage reshoring of manufacturing, protect American workers and rebalance trade relationships.
Trump has also directed the Office of the United States Trade Representative to initiate new investigations under Section 301 of the Trade Act of 1974 into what the administration described as unreasonable or discriminatory foreign trade practices.
While the domestic legal authority underpinning the tariffs has shifted from IEEPA to Section 122, officials said the overall direction of US trade policy -- combining tariffs with negotiated trade agreements -- remains unchanged.
For India, the immediate impact is a lower headline tariff rate compared to the earlier 18 per cent structure, though exporters will need to assess how product-specific exemptions and future investigations could affect sectoral trade flows.
