Donald Trump administration's 10% tariff on most Indian goods expires on July 24: What happens after that?

Possible outcomes: Tariffs could remain the same; rates could change depending on US investigations under Section 301; US could opt for a different instrument.

Washington: On Friday, the 10% tariff that has applied to most goods India ships to the US since February expires. It was always meant to. The measure was temporary by statute, a stop-gap improvised after the US Supreme Court demolished the legal basis of Donald Trump’s original tariff regime.

The expiry is not India’s alone. The same 10% applies to most of America's trading partners, and they are waiting on the same answer. In India’s case, Washington has two investigations open against it that could produce a replacement tariff. An interim trade agreement that would settle the question is close but unsigned. And a bill moving through the US Senate would authorise a levy of up to 100% on Indian goods over an entirely separate matter — the country’s purchases of Russian oil.

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What Indian exporters pay today

Indian goods entering the United States currently attract a 10% tariff imposed under Section 122 of the Trade Act of 1974, which permits the president to levy temporary duties to correct a fundamental balance-of-payments problem. It is paid on top of the most-favoured-nation rates every US trading partner pays, which vary by product.

Two categories carry heavier duties. Steel, aluminium and core metal articles face 50%, and automobiles and auto parts 25%, both under Section 232 of the Trade Expansion Act of 1962. Neither is affected by Friday’s expiry.

But there are some that escape the additional tariff altogether.

Exemptions established under Executive Order 14257 and widened by a White House clarification in April 2025 cover electronics — smartphones, laptops, data processing machines, semiconductor devices and integrated circuits — along with pharmaceuticals, energy products and critical minerals. These are among India’s largest export lines. Smartphones alone were worth $10.9 billion in 2024-25 and pharmaceuticals $9.8 billion, against total merchandise exports to the US of $86.51 billion that year. On the reckoning at the time, the exempted categories accounted for close to half of everything India sells to the American market.

Trump on Tuesday said in a social media post that generic drugs will continue to enter at zero tariff from August 1 for two years, before rising to 100% for a year and 200% after that, a schedule he cast as a penalty on manufacturers that decline to build production in the US.

The deal the courts undid

India and the US reached a framework agreement on February 7 that would have cut the tariff on Indian goods from 50% to 18%, removing along the way a 25% penalty imposed over India’s Russian oil purchases. In return, New Delhi signalled an intention to buy $500 billion of American goods — the commitment was non-specific, as was the period over which it would be met — and to open its market further to US exports, including limited agricultural products.

Commerce minister Piyush Goyal has been explicit about why India accepted those terms: at 18%, Indian exporters would enjoy an advantage over competitors such as China, Indonesia, Vietnam, Bangladesh, and Sri Lanka. He returned to the point after the most recent round of talks, and it remains the axis on which New Delhi’s position turns.

A key legal basis of that framework lasted briefly. On February 20 the US Supreme Court struck down Trump’s use of emergency economic powers to impose tariffs, taking the 18% rate for India, and the higher levies for its rivals, down with it. The framework anticipated something of the sort. Its text provides that “in the event of any changes to the agreed upon tariffs of either country, the United States and India agree that the other country may modify its commitments” — the clause New Delhi has leaned on ever since.

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Washington’s replacement, India’s problem with it

The administration’s answer is Section 301 of the same 1974 statute, which allows the US to retaliate against trading partners it finds to be engaging in unfair or discriminatory practices. Unlike Section 122 it carries no rate ceiling and no expiry date, but it requires a formal investigation first.

Two are open against India. One examines the use of forced labour in Indian products, and in early June, Washington proposed an additional 12.5% duty on that basis. India rejected the finding. The second, into excess manufacturing capacity, is still pending.