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US President Donald Trump has announced a new tariff policy that affects imports from 60 trading partners. It replaces the temporary tariff system that had been in place for the past five months.
What's going on: India will now face a 10% tariff on exports to the US.
This is lower than the 12.5% tariff the US had initially proposed as part of an investigation into whether countries were doing enough to stop goods made using forced labour from entering global supply chains.
On July 15, India updated its Foreign Trade Policy to give the government the power to restrict imports of goods made wholly or partly using forced labour.
The move addressed one of the US' key concerns and is expected to strengthen India's oversight of global supply chains while bringing its trade rules closer to international standards.
The new tariff policy covers nearly all US imports, around 99.4%. It also includes several exemptions and follows a tiered system, where countries that take stronger action against forced-labour imports are rewarded with lower tariff rates.
What does it mean for India: exporters in sectors such as textiles, apparel, leather, engineering goods and other labour-intensive industries will be watching closely, as many of them rely heavily on the US market.
