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हिन्दी — Read in HindiTrade policy, tariffs and trade agreements
How India trades: its policy, its tariffs and its agreements with other countries.
Showing 1 of 1 article, those that changed from 1 to 31 August 2026.Show all
American tariffs and India's exports
Copy link to American tariffs and India's exportsPrelims and Mains
LeadAmerican tariffs and India's trade: standards as the new price of entryAugust 2026
Why in news
Trade data released on 13 August 2026 showed India's goods trade deficit for July at a six month high, though exports grew by nearly a fifth. July was the first month under a new American duty of 10 per cent, imposed on India from 24 July under Section 301.
Background
- The United States is India's largest market for goods.
- American tariffs on India now rest on separate laws: Section 301 (unfair practices of other countries), Section 232 (national security; steel, aluminium and auto parts) and, for a time, Section 122 (a temporary tariff for at most 150 days).
- In July the American trade office ended an inquiry into forced labour in the exports of 60 trading partners, and imposed duties of 10 to 12.5 per cent.
- India and the United States have been negotiating a bilateral trade agreement; no interim deal was reached by the deadline.
Why India got the lower rate
- On 13 July India amended its Foreign Trade Policy to ban imports of goods made with forced labour.
- It was then placed at 10 per cent, against 12.5 per cent for competitors such as China and Vietnam.
- The lesson: access to a market now depends on a country's labour and environmental rules, and not only on its tariffs.
Why the deficit widened though exports rose
- Imports grew from a much larger base, and dearer crude and fertiliser, and larger electronics imports, raised the bill.
- Part of the rise in exports came from higher prices, not larger volumes.
- Services are the cushion: the surplus on services covered about half the goods deficit.
- Electronics imports remain far larger than electronics exports, which raises the question of how much value is added at home.
How far the tariff reaches
- About 45 per cent of India's exports to the United States, among them generic medicines and smartphones, are exempt.
- A threat hangs over generic medicines, with duties announced for 2028 unless production moves to the United States.
- Because rivals pay more, India's relative position did not worsen.
- A tariff imposed by executive order can be raised again; only a signed agreement gives certainty.
The way forward
- Conclude the bilateral trade agreement.
- Diversify markets, using the new pacts with the United Kingdom, Oman and others.
- Meet standards on labour, carbon and traceability at home, since more buyers will ask for them.
- Deepen domestic value addition in electronics.
Prelims facts
- Sections 301 and 122 are in the American Trade Act of 1974; Section 232 is in the Trade Expansion Act of 1962.
- The Directorate General of Foreign Trade, under the commerce ministry, notifies the Foreign Trade Policy.
- India runs a deficit in goods and a surplus in services.
- The Foreign Trade Policy in force is of 2023.
- The United States is India's largest export market for goods.
The United States is India's largest market for goods.
What changed
Show history (1 other update)
20 Sep 2026newly added
- The US President signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which allows tariffs of up to 100 per cent on countries that keep buying Russian oil and gas, subject to a presidential waiver.
- Russia supplied over half of India's oil imports in July, and India has conveyed its energy security concerns and is expected to seek a waiver.
Mains: Tariffs tied to energy purchases join trade policy to energy security, since India imports more than 85 per cent of its crude oil.
The Indian Express, 20 Sep 2026 · The Hindu, 20 Sep 2026 · The Hindu, 17 Sep 2026: As U.S. readies 100% tariffs, Russia provided more than half of India's oil imports in July (opens in a new tab)
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