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U.S. Tariff Action – India Assigned 26%

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In a landmark executive action, the U.S. President has signed an order adjusting import tariffs based on reciprocal trade imbalances and national interest objectives. India is one of the countries directly affected, with its reciprocal tariff rate adjusted to 26%, up from previous preferential or MFN levels.

This strategic trade move is aimed at rebalancing trade deficits and incentivizing fair market access for U.S. exporters. The revised tariff framework is backed by an extensive list of over 3,000 product lines under HTS codes across sectors like chemicals, minerals, fuels, and rare metals.

Top 10 Takeaways for Indian Exporters:

  1. India’s new tariff rate for exports to the U.S. is set at 26%

  2. The action is part of a reciprocal tariff realignment with 70+ countries (Annex-I), many of whom face similar hikes. No exemptions for developing countries – Vietnam, Sri Lanka, and Bangladesh are all included.

  3. ‘Reciprocal Tariff Adjustment’ is not uniform – countries like Lesotho face 50% while others like Nigeria see 14%.

  4. The implementation of the order will be on April 05, 2025 – 12:01am Eastern Daylight Time with an initial levy of 10% and the full rate as per the Order (India – 26%) from April 09, 2025 – 12:01am Eastern Daylight Time.  Goods already loaded onto a vessel at the port of loading and in transit on the final mode before the specified timing but land after the date shall not be subject to these new ad valorem rates of duties.

  5. Annex II lists product that are excluded from the ad valorem tariffs under this order. Excluded products include copper, aluminum, bauxite, fluorspar, graphite, APIs, and many chemicals.Exporters must validate their product’s HTSUS classification against Annex II to assess the exemption.

  6. These goods may face separate or alternative duty treatment, yet to be announced.

  7. The rates of duty established by this order are in addition to any other duties, fees, taxes, exactions or charges as applicable to such imported articles, except as provided in the exemptions of the order.

  8. In order to establish the duty rates described in the order, the HTSUS is also modified as set forth in the Annexes to this order. The modifications will take effect on the dates as mentioned in the order. Exporters can refer to https://hts.usitc.gov/ for further details.

  9. Accurate classification of export products under HTS codes is now more critical than ever.

  10. This change could significantly impact pricing, margins, and competitiveness in the U.S. market

This tariff realignment by the U.S. President marks a paradigm shift in trade policy, introducing stricter, country-specific import duties aimed at promoting reciprocal trade. Indian exporters must act now – assess your product lines, understand revised tariff rates, map HTS codes, track regulatory updates, and prepare contingency plans for what may come next.
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* The Annex I has been updated where rate against India has been edited to 26%
(https://www.whitehouse.gov/wp-content/uploads/2025/04/Annex-I.pdf) 

Disclaimer:
This summary reflects the Presidential Order and details as currently issued. Future U.S. trade actions or clarifications may alter its implementation. Exporters should refer official sources or trade advisors before making commercial decisions.

Annual RoDTEP Return Filing Online Module Activated

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In continuation of DGFT Public Notice No. 27/2024-25, exporters with RoDTEP claims of ₹1 crore or more in FY 2023-24 must now file their Annual RoDTEP Return through the newly activated online module.

DGFT, via Trade Notice No. 27/2024-25 dated 29th January 2025, has released a detailed manual & FAQs to guide exporters through the filing process.

🚨 Key Compliance Points:
✅ Exporters must file separate returns for DTA(Appendix 4R) and AA/SEZ/EOU(Appendix 4RE) exports as per Policy.

✅ Seperate returns are required only for HS Codes with ₹50 lakh+ RoDTEP benefits or single return for the highest accrued 8 digit HS code must be filed.

✅ Pro-rata tax calculation is required and must be justifiable if scrutinized.

✅ Only non-refunded taxes/levies should be reported (GST/exempted taxes excluded).

✅ Exporters must submit HS Code, UQC, product description, export quantity, and FOB
value.

✅ Transport costs should include VAT & Excise duty for both inbound and outbound (road & rail).

✅ Additional costs like electricity duty, stamp duty, and captive fuel duty must be reported.

✅ Merchant exporters with ₹1 crore+ RoDTEP claims are also required to file the annual return with data support from their manufacturers. 

✅ Fuel tax claims can be approximated based on transporters’ data and should be maintained for verification.

✅ Filing is mandatory if RoDTEP claim value exceeds ₹1 crore, even if the actual claim received is lower.

📌 Deadline: Exporters must file their returns by 31st March 2025 to avoid penalties or late fees.

🔗 Visit the DGFT Portal to file your RoDTEP Annual Return and refer to the Manual & FAQs for guidance.

Amendments for Online Certificate of Origin (eCoO) System

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In alignment with the online issuance of Certificates of Origin (CoO) for both Preferential and Non-Preferential categories through the new platform https://trade.gov.in, DGFT has issued Public Notice No. 43/2024-25, dated 27th January 2025. The notice amends specific paragraphs of the Handbook of Procedures to ensure consistency with the implementation of the new eCoO system.

Key Changes Introduced

  1. Deletion of Para 2.91(d)
    • The provision allowing the Export Inspection Council (EIC) to print blank certificates and issue them under a specific procedure has been deleted.
  2. Amendment to Para 2.93(c)
    • For the issuance of Non-Preferential Certificates of Origin, only the Invoice and Packing List need to be uploaded online.
    • The fee for each CoO is fixed at ₹200, which includes the attestation of any additional documents.
  3. Addition to Para 2.93(d)
    • A provision has been added to allow the issuance of in-lieu Certificates of Origin (CoO) by the same issuing agency for corrections in previously issued eCoOs.
  4. New Para 2.93(f)
    • A provision has been added to permit the issuance of Back-to-Back Certificates of Origin (Non-Preferential) for goods not of Indian origin that are being re-exported, transshipped, or used for merchanting trade purposes.
    • These certificates will be issued based on documentary evidence confirming the original foreign country of origin.
    • The details of the supporting documents must be explicitly mentioned on the back-to-back CoO issued.

Effective Date

  • The Public Notice is applicable with immediate effect.

Action Required

Exporters are advised to refer to Public Notice No. 43/2024-25, dated 27th January 2025, available on the DGFT website, for detailed information and compliance guidelines

DGFT Expands Exemption List for Quality Control Orders (QCOs) under Advance Authorization, EOU, and SEZ

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In line with recent updates to Quality Control Orders (QCOs) from various ministries and departments, the Directorate General of Foreign Trade (DGFT) has issued Public Notice No. 31/2024-25 dated 05th November 2024.

This notice amends Appendix-2Y, adding the Ministry of Heavy Industries to the list of ministries/departments exempted from mandatory QCO requirements for exports under Advance Authorization holders, EOUs, and SEZs.

With this addition, the Ministry of Heavy Industries is now included at Sr. No. 6 in the list, joining the Ministry of Steel, DPIIT, Ministry of Textiles, Ministry of Mines, and the Department of Chemicals & Petrochemicals (Sr. Nos. 1 to 5).

Exporters dealing with QCO requirements issued by the Ministry of Heavy Industries can now avail exemptions under this public notice by adhering to the existing guidelines.

For full details, please refer to the official public notice.

Clarification on RCMC Requirement for Remission-Based Schemes

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Exporters have frequently encountered confusion regarding whether an RCMC (Registration-Cum-Membership Certificate) is required to claim benefits under various schemes of the Foreign Trade Policy (FTP).

The DGFT, through its Trade Notice No. 19/2024-25 dated 04.10.2024, has clarified that schemes such as Duty Drawback, Rebate of State & Central Taxes and Levies (RoSCTL), and Remission of Duties and Taxes on Export Products (RoDTEP) fall under the category of Remission-Based Schemes, and the requirement of an RCMC does not apply to these schemes.

Exporters can claim benefits under these schemes without obtaining an RCMC.

However, exporters applying for any authorization to import/export under the FTP, which are distinct from the Post Export Remission-Based Schemes, will still require an RCMC, as per Para 2.57 of FTP 2023.

Exporters are advised to refer to the Trade Notice for further details.

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One Month Extension for Interest Equalization Scheme (IES)

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DGFT vide its Trade Notice No. 16/2024-2025 dated 31st August 2024 has extended the Interest Equalization Scheme for Pre & Post Shipment Rupee Credit from 31st Aug 2024 to 30th Sept 2024.

However, this extension is only for MSME Manufacturers who can claim IES @ 3%.

Apart from the extension of the date, all terms remain same as per relevant RBI Notifications.

MSME Manufacturer Exporter can continue to avail the benefit for 1 more month under IES.

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SCOMET Items updated vide Amendment in Appendix 3

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DGFT vide Notification No. 25/2024 dated 02.09.2024 issued a new updated Appendix 3 (SCOMET Items) list.

The New SCOMET Appendix is available on the DGFT Portal under the heading “Regulatory Updates” and under the Sub Heading ” Import, Export and SCOMET Policy”,
under SCOMET List Tab.

The industry will be provided 30 days from the date of issuance (i.e from 02.09.2024) for the transition time.

Exporter are requested to review the SCOMET Items and effectively be prepared for their exports.

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