Reciprocal Tariffs Are Gone, But Other U.S. Tariffs Continue to Impact Indian Exporters

Even as reciprocal tariffs between the United States and India have been rolled back, Indian exporters are still grappling with multiple American trade measures imposed over the last year. Industry bodies say that while the removal of retaliatory duties provided temporary relief, other tariff regimes — particularly on steel, aluminium and low-value imports — continue to weigh heavily on shipments to the U.S.

The developments come amid evolving trade negotiations between India and the United States, where market access and tariff barriers remain key sticking points.

Steel and Aluminium Tariffs Continue to Bite

One of the most significant hurdles for Indian exporters remains the tariffs imposed under Section 232 of U.S. trade law on steel and aluminium imports. These duties were first introduced during the presidency of Donald Trump and have continued in modified forms under subsequent administrations.

Indian steel and aluminium producers argue that the additional duties reduce their price competitiveness in the American market, leading to thinner margins and, in some cases, loss of long-term contracts. Exporters say that even niche and specialty metal producers have felt the impact, as buyers increasingly turn to domestic U.S. suppliers or countries with preferential access.

Industry estimates suggest that thousands of tonnes of metal exports annually are affected, with cascading impacts on ancillary industries such as auto components, engineering goods, and infrastructure materials.

De Minimis Rule Changes Hit Small Exporters

Another major concern is the tightening of U.S. rules on imports valued below $800 — often referred to as the “de minimis” threshold. Previously, goods under this value could enter the U.S. duty-free and with minimal paperwork, benefiting India’s booming small-scale exporters and e-commerce sellers.

However, recent changes have introduced stricter scrutiny and, in some cases, additional tariffs on certain categories of low-value shipments. This has particularly hurt small and medium enterprises (SMEs) engaged in handicrafts, textiles, jewelry, leather goods and consumer products.

For many Indian sellers leveraging online marketplaces to access American consumers directly, the shift has meant higher compliance costs, longer shipping times and reduced demand due to price increases.

Engineering and Auto Components Also Affected

Exporters of engineering goods and automobile components have flagged continuing cost pressures due to tariff uncertainties. Even when sector-specific exemptions are available, procedural delays and documentation requirements create operational bottlenecks.

Trade analysts point out that American importers, wary of regulatory changes, are increasingly diversifying sourcing to mitigate risks. This has intensified competition for Indian suppliers in key sectors.

Trade Negotiations Continue

Officials from India and the United States have been engaged in discussions aimed at strengthening bilateral trade ties. Both sides have expressed interest in expanding market access and reducing tariff and non-tariff barriers.

However, experts caution that trade negotiations are often complex and prolonged. While reciprocal tariffs may have been rolled back, structural trade measures such as Section 232 duties require broader policy decisions in Washington.

Impact on Export Growth

The United States remains one of India’s largest export destinations, spanning sectors such as pharmaceuticals, IT services, textiles, engineering goods and gems and jewelry.

Economists note that persistent tariff barriers could slow export growth, especially at a time when global trade is already facing headwinds from geopolitical tensions and supply chain disruptions.

For small exporters, particularly those operating on thin margins, the continued imposition of duties may determine whether they can sustain operations in the competitive U.S. market.

Industry Seeks Policy Clarity

Indian trade bodies are urging both governments to prioritize tariff relief and provide long-term clarity. Exporters argue that predictability in trade policy is as important as tariff reductions themselves.

As bilateral talks progress, businesses remain hopeful that future agreements could ease the burden on sectors currently under strain.

Until then, while reciprocal tariffs may be gone, the broader tariff landscape continues to challenge Indian exporters seeking growth in the American market.