Indian Exports to US Return to MFN Tariffs as Section 122 Surcharge Expires

Around 92% of India’s $87.2 billion merchandise exports to the US shift back to WTO-compatible MFN tariffs from July 24, while 8% remain under Section 232 duties.

Indian merchandise exports to the United States have reverted to the WTO-compatible Most-Favoured-Nation (MFN) tariff structure following the expiry of the 10% surcharge imposed under Section 122 of the US Trade Act, 1974.

The surcharge expired at 9:31 AM IST on Friday, July 24, bringing tariff relief for a majority of Indian exports to the US. According to the Global Trade Research Initiative (GTRI), nearly 92% of India’s $87.2 billion merchandise exports to the US will now be covered under the standard MFN tariff regime.

The remaining 8% of India’s exports, including steel, aluminium and auto components, will continue to be subject to high national security tariffs under Section 232, with no change in duty structure.

The tariffs are applicable based on the exact date and time when goods are entered for consumption or withdrawn from a US customs warehouse, rather than the date they are shipped or arrive at a US port.

The report also noted that investigations by the US Trade Representatives under Section 301 of the Trade Act are currently in progress. It stated that the investigation concerning forced labour products is nearing completion, and the next set of duties is likely to be introduced under this section.

According to GTRI, Indian exports have experienced three different US tariff regimes in less than a year—beginning with 50% reciprocal tariffs, followed by the 10% Section 122 surcharge, and now returning to the Most-Favoured-Nation (MFN) tariff structure.