India has avoided a steeper U.S. tariff hike after the Trump administration imposed a 10 percent duty instead of the previously anticipated 12.5 percent. While the lower rate offers temporary relief, exporters remain concerned that ongoing U.S. trade actions could create fresh challenges in the months ahead.

The revised tariff provides Indian exporters with a modest competitive advantage compared with earlier expectations. According to the Indian government, nearly 45 percent of India’s exports to the United States remain exempt from the additional duty, while the remaining exports will face the new 10 percent tariff. India and the United States continue negotiations toward a broader bilateral trade agreement aimed at strengthening economic ties.

Despite the immediate relief, industry experts say uncertainty remains high. Businesses are closely monitoring possible U.S. actions related to excess manufacturing capacity, Russia-linked trade measures, and sector-specific investigations that could affect future exports. Exporters fear policy unpredictability may complicate long-term investment decisions and supply chain planning.

A major concern for India’s textile and apparel industry is the proposed three-year tariff-rate quotas (TRQs) for Bangladesh, Cambodia, Indonesia, and Malaysia. Under the proposal, certain textile and apparel exports from these countries could enter the U.S. market without Section 301 duties if they meet specified conditions, potentially reducing India’s competitiveness in one of its largest export markets.

Industry representatives warn that the additional 10 percent tariff, combined with preferential treatment for competing countries, could affect India’s multi-billion-dollar textile and apparel exports to the United States. They are urging the government to accelerate trade negotiations with Washington and secure a comprehensive agreement that provides long-term certainty for exporters.

For now, exporters welcome avoiding a larger tariff increase but remain cautious as U.S. trade policy continues to evolve. Many believe that a balanced trade agreement will be essential to maintaining India’s competitiveness in the American market while protecting the interests of key export sectors.