US imports from India pay a 10% Section 122 tariff — down from 18% under the IEEPA regime the Supreme Court invalidated on February 20, 2026. That's an 8-point cut on roughly $87 billion of annual India-to-US trade. But the headline masks real cost: India has no FTA with the US, so the MFN base rate stacks in full on top of the 10%. Cotton apparel from Tirupur still pays 16.5% MFN + 10% Section 122 + fees — about 27% all-in. And the interim US-India trade agreement signed in late 2025 is largely moot now that IEEPA is dead. Here's what Indian goods actually cost US buyers in April 2026.
Current India Tariff Structure (Post-SCOTUS)
The baseline on Indian imports is 10% Section 122, effective February 24, 2026 and scheduled to expire approximately July 24, 2026. It replaced the 18% IEEPA reciprocal rate that applied from April 2025 through February 2026. No FTA exists between the US and India — the US-India Interim Agreement signed November 2025 reduced IEEPA rates in selected sectors, but those provisions are now moot because IEEPA itself was struck down. MFN base rates apply in full on top of the 10%. Section 232 surcharges still hit: steel at 50%, aluminum at 50%, copper at 50%, semiconductors at 25%. The 100% surcharge on patented pharmaceutical goods also remains in effect.
The IEEPA Rate Was 18% — Not 26%
Worth clearing up a common confusion. The original IEEPA reciprocal rate announced for India in April 2025 was 26%. The US-India Interim Agreement in November 2025 cut it to 18% in exchange for Indian concessions on agricultural market access and digital services. That 18% rate applied from late November 2025 through February 20, 2026 when SCOTUS invalidated it. So if you're reconciling duty paid between November 2025 and February 2026, your IEEPA line was 18%, not 26% — check your CBP Form 7501 entries. Any refund calculation on IEEPA duty paid during that window should start from 18%.
Worked Example: $15,000 Tirupur Cotton Apparel Shipment
Take a $15,000 CIF shipment of men's cotton knit t-shirts from Tirupur under HTS 6109.10.00. MFN rate: 16.5% = $2,475. Section 122 at 10% = $1,500. MPF at 0.3464% = $51.96. HMF at 0.125% = $18.75. Total duty: $4,045.71 — effective 27.0%. Under the 18% IEEPA regime, the same container paid $5,245.71 — MFN $2,475 + IEEPA $2,700 + $70.71 fees — roughly 35.0%. The SCOTUS ruling saved this importer $1,200 per container. On a 500,000-unit annual apparel program at $3.50 FOB, that's $1.75M in annual CIF value — the 8-point rate cut is worth about $140,000 a year in duty.
Pharma, Generics, and the 100% Patent Surcharge
India is the world's largest supplier of generic pharmaceuticals — roughly 40% of US generic drug volume originates from Indian plants (Sun Pharma, Dr. Reddy's, Cipla, Aurobindo, Lupin). Generic active pharmaceutical ingredients (APIs) and finished drug products at HTS 2941 and 3004 pay 0% MFN. That's the critical number: $1M of Indian generics pays $100,000 in Section 122 and essentially nothing else. But the 100% surcharge on patented pharmaceutical goods imposed in 2025 still applies — branded drugs and patented biologics get hit. If your supplier's product is generic (off-patent), you pay 10%. If patented, you pay 110%. Get the patent status in writing before you negotiate landed cost.
Textiles and Apparel — Where MFN Actually Hurts
Apparel is India's biggest US export category — about $9 billion a year, concentrated in Tirupur (knits), Bangalore (women's woven), and Delhi NCR (men's formal). MFN rates on textiles and apparel are some of the highest in the US schedule: 16.5% on cotton knits, 17% on cotton woven shirts, 28.6% on synthetic knitwear, 32% on some women's synthetic outerwear. None of that is waived — no FTA, no GSP (GSP expired December 2020 and was never renewed). Add 10% Section 122 and you're at 27-42% effective rates on most apparel. That's why Bangladesh (was 37% IEEPA, now 10% Section 122) and Vietnam (was 46% IEEPA, now 10% Section 122) have closed the apparel cost gap dramatically — all three now pay the same 10% Section 122, so the competition shifts to MFN + freight + speed.
India vs Bangladesh vs Vietnam — The New Math
Before February 20, India paid 18% IEEPA, Bangladesh paid 37%, Vietnam paid 46%. India was the clear cost winner for apparel. After SCOTUS, all three pay 10% Section 122 flat. MFN rates are near-identical across the three (16.5-17% on most cotton knits). So the apparel sourcing decision now turns on: (1) speed — Vietnam runs 18-22 day ocean transit to the US West Coast vs 30-35 days from Indian ports, (2) freight cost — India Mumbai/Nhava Sheva runs higher per-container rates than Ho Chi Minh right now, (3) MOQ and lead time — Bangladesh still wins on high-volume basics at tight price points, (4) capacity constraints in specific categories. The 10% Section 122 expiration on July 24 will reshuffle the math again.
What Happens After July 24, 2026
Section 122's 150-day clock expires around July 24, 2026. If Congress lets it lapse, Indian goods pay MFN only — cotton apparel drops to 16.5%, generic pharma drops to 0%, machinery to 0-2.5%. If Congress extends at 10%, the current rate holds. If Congress passes higher permanent rates tied to Section 301 investigations USTR opened March 11, 2026, India could face targeted tariffs on specific sectors (digital services, pharma, agricultural goods have all been flagged). Any Indian supply contract signed in April with a delivery date past August 1 needs a duty adjustment clause. Don't assume the 10% rate holds — price all three scenarios.
Key Takeaway
Indian goods are 8 points cheaper to import than they were in January 2026 — 10% Section 122 beats the 18% IEEPA rate that was in effect. Generics and most chemicals pay about 10% total. Apparel still stings at 27%+ because MFN is the dominant cost, not the reciprocal layer. And the July 24 expiration is the real 2026 planning variable. Pull the specific HTS, model the landed cost, and build duty flex into any contract that delivers past the summer.
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