Commodities falling under Section 232 of US trade law are likely to remain outside the scope of the India-US landmark trade deal that reduces tariffs to around 18%, though India is hopeful of securing concessions under the provision at a later stage, a government source said.
The source added that India and the US have reached an understanding on the agreement, and a joint statement outlining the broad contours of the deal is expected within the next two to three days.
Section 232 allows the US President to impose tariffs or quotas on imports deemed a threat to national security. Steel, aluminium and copper currently face tariffs of nearly 50% under the provision, while certain auto components attract tariffs of around 25%. These levies are expected to continue even as broader tariff reductions come into force under the new trade arrangement.
“Section 232 has been imposed on several countries, including India. While these tariffs are likely to continue for now, India may receive some concessions at a later stage,” a highly placed source said.
India and the US announced the landmark trade deal on Monday night, under which tariffs on a wide range of Indian exports are expected to be reduced from 50% to about 18%, providing relief to several labour-intensive and export-oriented sectors.
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According to sources, the agreement includes a $500-billion commitment over five years, covering merchandise purchases across sectors such as aircraft, data centres, LPG, coking coal, gold, textiles, leather and jewellery. However, the five-year timeframe was not explicitly outlined by US President Donald Trump in his social media announcement on Monday evening.
Sources indicated that investments in data centres alone could account for nearly $20 billion, while some measures announced in the Union Budget 2026 are also understood to be part of the broader trade understanding.
On the issue of zero tariffs, sources said India is also expected to receive zero-tariff access in several categories, pointing to a more balanced outcome than initially perceived.
Speaking during a press briefing at New Delhi, Commerce and Industry Minister Piyush Goyal said labour-intensive sectors were particularly upbeat about the agreement. He noted that fishermen and seafood exporters are among those expected to benefit and that the deal would open up multiple new opportunities for Indian businesses.
Goyal added that the agreement would strengthen India-US ties, including cooperation in high-technology sectors, and described the outcome as best deal than trade arrangements secured by peer economies such as Bangladesh, Indonesia and Vietnam. He said the 18% tariff level was achieved after months of negotiations, despite several sticking points.
The minister emphasised that India had successfully navigated these challenges, while ensuring that the interests of farmers and the dairy sector remain protected.
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