Section 232 tariff stays, reciprocal duties to be reduced in India-US deal: Union Commerce and Industry Minister Piyush Goyal

In a recent interview in New Delhi, Union Commerce and Industry Minister Piyush Goyal discussed the back-pedal on the pending rebate on aluminium, steel, and copper.

Earlier, a rebate was expected on the Indian exports of raw metals, but on the basis of  the US national security duties defined in their Section 232 tariffs under the Trade Expansion Act of 1962, the tariffs remain at 50 per cent.

“No, there’s no confusion. Everybody knows. And that’s a Section 232 tariff. It’s not a reciprocal tariff. Thats national security clause under which they have conducted an investigation,  and these products are at 50 per cent globally. Nothing to do with India. So we are on the same footing as any other country in the world,” stated Goyal.

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Under this agreement, exports of raw metals worth USD 5 billion (FY2025) will remain unaltered. However, the exports include a reduction of the reciprocal duties by the US from 50 to 18 per cent, enhancing profitability.

The Department of Commerce of the US determined that imported aluminium and steel threatened to impair national securityby undermining domestic production capacity. Thus, came the Section 232 duties on US imports to ensure protection of domestic production capacity, reducing reliance on foreign suppliersand prevent economic, technical and military decline.

The minister further said, “They have given us certain exemptions, like aircraft components that we export, which will get zero duty even undersection 232. So that will all come out when the final agreement is placed before the people,” discussing the scope of cutting-edge manufacturing targets with shielding indian exporters in the challenging global market with the forthcoming India-US trade deal. 

Also read: India-US pact: Reduction from 50% to 18% tariffs in exchange for Russian oil halt, rebate on aluminium yet to come

Finished products like aluminium extrusions, foils, and castings or wires, pipes, tubes, along with automotive components, that include significant volumes of the raw materials, will be exempted from reciprocal tariffs.

On the other hand, the Union Commerce and Industry Minister shared a list of products that will be exported with zero duties, including gems and diamonds, pharmaceutical products, smartphones, spices, tea, coffee, nuts, mango, banana, mushrooms and many more worth USD 44 billion. 

Besides exports, India plans to buy USD 500 billion worth of energy, aircraft, metals, ICT and coking coal over the next 5 years and creates a space for the US toconsider reducing import tariffs on the pharmaceuticals, technological, and agricultural goods.

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The deal comes with an opportunity to compete in the open market, which is worth USD 30 trillion, especially for the Ministry of Micro, Small and Medium Enterprises (MSME) of India. 

The complete agreement is to wrap up in the coming six weeks and is expected to eliminate all the confusion with spaces for either country to adjust tariff levels according to their commitments.

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