US Tariffs – India Seen Holding Export Edge Despite Fresh Section 301 Duty
US Tariffs – The additional 10 per cent tariff imposed by the United States under Section 301 is expected to have only a limited effect on India’s export performance, according to the Federation of Indian Export Organisations (FIEO). The exporters’ body said India’s position remains relatively strong because many competing exporting nations are facing similar or even higher tariff rates, reducing the likelihood of a major shift in global competitiveness.
India Remains Among Lower Tariff Countries
FIEO President S.C. Ralhan said the newly announced measure will raise the landed cost of Indian products entering the US market. However, he stressed that the impact should be evaluated by comparing India’s tariff treatment with that of other supplier countries rather than viewing the decision in isolation.
He noted that India has been placed in the 10 per cent tariff category, while countries including China, Vietnam, Thailand, Türkiye, the United Arab Emirates, Brazil and South Africa are subject to a higher tariff of 12.5 per cent. According to Ralhan, this reflects the US assessment of India’s efforts to strengthen its legal and policy framework concerning forced labour.
Labour-Intensive Sectors Expected to Stay Competitive
FIEO pointed out that several of India’s major competitors in labour-intensive industries have also been placed under the same 10 per cent tariff bracket. These include Bangladesh, Cambodia, Pakistan, Sri Lanka, Indonesia and Malaysia.
Because competing exporters will face an identical duty burden in the US market, Indian manufacturers in sectors such as textiles, garments, leather goods and footwear are expected to retain their competitive position. The organisation believes this should help minimise any significant disadvantage arising from the latest tariff measure.
Scope for Market Gains in Selected Segments
The exporters’ body also suggested that India could benefit in product categories where rival exporting countries face the higher 12.5 per cent tariff.
Ralhan observed that even a tariff gap of 2.5 percentage points can influence sourcing decisions for international buyers, particularly in highly competitive industries. He said Indian exporters may be able to attract additional business by offering dependable supply chains, consistent product quality and timely deliveries alongside the relatively favourable tariff treatment.
Tariff Decision Not Directed at Indian Products
FIEO clarified that the Section 301 action is part of a broader policy covering multiple economies and should not be viewed as a measure specifically targeting Indian exports or manufacturers.
The organisation also highlighted that several important export categories remain outside the scope of the new duty. Products already covered under Section 232 measures—including steel, aluminium, automobile components, pharmaceuticals, pharmaceutical ingredients and certain agricultural items—continue to enjoy existing exclusions, limiting the overall effect on several key export sectors.
Government Reforms Credited for Better Position
According to FIEO, reforms introduced by the Government of India to strengthen laws and policies related to forced labour have contributed to the country’s comparatively favourable tariff status. The organisation believes these policy improvements have helped India secure an advantage over several competing exporting nations facing higher duties.
Exporters Advised to Review Product-Level Impact
FIEO has encouraged exporters to examine the implications of the new tariff on a product-by-product basis instead of making broad assumptions. Businesses have been advised to consider applicable US duties, available exemptions and the tariff treatment of competing supplier countries before making commercial decisions.
The organisation further recommended that exporters continue investing in quality improvement, innovation, productivity and stronger supply chain compliance. It said these measures will help Indian companies remain competitive and take advantage of emerging opportunities in the US market despite the latest tariff changes.