New Delhi, Jul 25 (PTI) The government on Saturday said the US has placed India in the lower 10 per cent tariff bracket under its Section 301 measures on alleged forced labour concerns and reiterated its commitment to working with Washington for the early conclusion of the bilateral trade agreement.

The United States Trade Representative (USTR) on July 23 announced the final measures under Section 301 of the US Trade Act, 1974 under which it imposed 10 per cent additional import duty on Indian goods from July 24.

The measures follow USTR's investigation into the acts, policies and practices of 60 economies, including India, relating to the imposition and enforcement of prohibitions on the importation of goods produced with forced labour.

The US had initially proposed 12.5 per cent tariffs on India. These 10 per cent duties replaced the earlier 10 per cent temporary tariffs imposed for 150 days from February 24.

Commenting on the US move, the commerce ministry in a statement said India remained closely engaged with USTR throughout the investigation via detailed written submissions and in-person consultations, including participation in public hearings.

"As a result of these sustained efforts, India has been placed in the lower tier of additional tariffs under the final measures, providing a relative advantage to Indian exports in key sectors," the commerce ministry said in a statement.

It said a substantial share of India's exports to the US (USD 87.31 billion in 2025-26), which currently attract zero additional duties, such as generic pharmaceuticals, smartphones and certain other specified products, continue to remain outside the scope of the additional 10 per cent duty.

Further, products already covered under Section 232 measures, including steel, aluminium and auto parts, are not subject to the additional 10 per cent duty. According to think tank GTRI, these products account for about 8 per cent of India's exports and they attract 25 per cent or 50 per cent tariffs in addition to the normal US MFN (most favoured nation) duty.

Section 232 sectoral duties are applicable broadly to all countries with limited exceptions.

"On account of these exemptions, an estimated 45 per cent of India's exports to the US remain outside the purview of the additional 10 per cent Section 301 duty," the ministry said.

The remaining 55 per cent of exports will attract the additional 10 per cent duty, where India's tariff incidence is comparatively lower than that for most other economies covered by the investigation.

"The government remains committed to working with the US towards the early conclusion of the India-US Bilateral Trade Agreement, as announced on 2nd February 2026 and in accordance with the Joint Statement issued on 7th February 2026," it said.

TEXTILES ISSUE ------------------ Allaying concerns of textiles exporters, the ministry said the textile-specific mechanism referenced in the final measures of Section 301 probe on forced labour issues is yet to be established and operationalised and India continues to engage with the US on this matter as part of the ongoing negotiations for the BTA.

Experts and exporters have stated that India has not received the textile and apparel tariff-rate quota (TRQ) exemption under the new US Section 301 forced-labour tariff.

The exemption applies to specified volumes of textile and apparel exports from Bangladesh, Cambodia, Indonesia, and Malaysia that use US-origin cotton and fibre.

The USTR has announced that textile TRQs (quota-based duty concessions) will be established for Bangladesh, Cambodia, Indonesia, and Malaysia for an initial period of three years.

Under this, these countries would import US cotton and textile goods for final manufacturing and export to the US at a concessional duty.

Bangladesh is one of the major textile exporters in the world. It is also a top competitor of India in the sector. Bangladeshi traders import large quantities of Indian cotton and fibre, but after this TRQ, they may now import from the US.

Expressing serious concerns over the 10 per cent duty, the Confederation of Indian Textile Industry (CITI) has said the US tariff could also affect exports of intermediate textile items from India to other nations.

The US is the single-largest market for India's textile and apparel items. Exports of textile and apparel products from India to the US are usually close to USD 11 billion.

In February, Commerce and Industry Minister Piyush Goyal expressed confidence that India will get concessional duty access for garments made using American yarn and cotton under its trade agreement with the US, similar to the benefits currently provided to Bangladesh.

MEANING OF ADDITONAL 10 PC TARIFF ------------------------------------------- The tariffs on import duties by the US on its trading partners, including India, are imposed on over and above the existing duties (also known as MFN duty) a product face in the US market.

For instance, a shirt from India that currently attracts a 5 per cent import duty in the US will now face a total tariff of 15 per cent after the additional 10 per cent levy.

WHAT IS LOWER BRACKET OF 10 PC ---------------------------------------- The USTR in March initiated two Section 301 probes against a number of countries, including India on issues pertaining to forced labour and excess industrial capacity.

In June, the US proposed 12.5 per cent tariffs on 54 countries, including India, for allegedly failing to prohibit the import of goods produced with forced labour. It had proposed a 10 per cent duty on six regions, incluidng Pakistan and the European Union.

In July, India amended its foreign trade policy to prohibit the import of goods produced using forced labour. Washington took note of this amendment and imposed a 10 per cent duty on India.

WHAT HAPPEN TO THE OTHER PROBE ----------------------------------------- The US has not yet released any report on the probe on the issue of excess industrial capacity.

According to the GTRI, the Trump administration is expected to announce the results of that investigation, which could lead to additional tariffs on a wide range of industrial products.

BTA ----- The two are negotiating a bilateral trade agreement. They have finalised a framework deal for the first phase of the pact. India is seeking comparative and competitive advantage over its peer countries at the tariff front. PTI RR TRB

Forced-labour import tariffs place Indian goods under an additional duty while exemptions preserve access for specified exports. A 10 per cent Section 301 additional import duty applies to specified Indian goods over and above ordinary most-favoured-nation duty, following a forced-labour-related investigation. Generic pharmaceuticals, smartphones, other specified products, and goods already subject to Section 232 sectoral duties remain outside the additional levy. The textile-specific mechanism has not yet been operationalised for India, while tariff-rate quota concessions using US-origin cotton and fibre were announced for certain other economies. India continues engagement on a bilateral trade agreement and tariff access for garments using American inputs.