US Announces Selective Tariff Reductions on Certain Equipment, Limited Economic Impact for India Expected

US Administration Announces Reduction in Tariffs on Selected Industrial and Agricultural Equipment

The US administration has announced a significant reduction in tariffs on selected industrial and agricultural equipment containing steel, aluminium, or copper from 25 per cent to 15 per cent, according to think tank GTRI, which made the announcement on Tuesday.

The changes offer limited benefits for India, with the Global Trade Research Initiative Founder Ajay Srivastava stating that while exporters of engineering goods, HVAC equipment, electrical equipment, and agricultural machinery may gain from the reduced 15 per cent tariff, the overall impact is likely to be modest. Some manufacturers could potentially qualify for the new 10 per cent rate by using US-origin metals.

The lower rate will apply from June 8, 2026, through December 31, 2027. The reduction in tariffs will benefit products such as heating and air-conditioning equipment, bulldozers, forklifts, harvesters, agricultural machinery, and certain electrical grid equipment.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

A new 10 per cent tariff category has been introduced for imported products manufactured using at least 85 per cent U.S.-origin steel, aluminium, or copper by weight. Products containing 15 per cent or less steel, aluminium, or copper by weight will continue to remain exempt from Section 232 tariffs.

However, the core metal tariffs remain unchanged. Most imported steel, aluminium, and copper articles will continue to face a 50 per cent tariff, while many downstream and derivative products made from these metals will remain subject to a 25 per cent duty.

India imported approximately USD 2.9 billion worth of steel, aluminium, copper, and related products from the United States in FY2026, creating some opportunity for Indian manufacturers to use U.S.-origin inputs and qualify for the lower tariff when exporting finished products back to the US.