Indian tariffs and non tariff barriers highlighted in US 2026 National Trade Estimate

The US Trade Representative’s 2026 National Trade Estimate report flagged India’s trade regime as a barrier. The report, released on March 31, said India keeps "high" import duties. It also pointed to non-tariff steps that can affect market access. The document covers policies shaping US exports, investment, and digital trade.

India has said its tariff system follows World Trade Organisation rules. Still, the report argued India can shift rates quickly. It cited a wide gap between WTO bound and applied rates. The report said this gap creates uncertainty for "US workers, farmers, ranchers, and exporters."

Like the 2025 edition, the 2026 report repeated concerns on tariffs and regulation. Trade experts said many points mirror earlier filings. Some items were said to be already settled. The report listed sectors spanning agriculture, medicines, and alcohol. It also raised issues on intellectual property, services, digital trade, and transparency.

"India maintains high applied tariffs on a wide range of goods, including vegetable oils (as high as 45 per cent); apples, corn, and motorcycles (50 per cent); automobiles and flowers (60 per cent); natural rubber (70 per cent); coffee, raisins, and walnuts (100 per cent); and alcoholic beverages (150 per cent)," the report has said.

Product group	Tariff level cited
Vegetable oils	Up to 45 per cent
Apples, corn, motorcycles	50 per cent
Automobiles, flowers	60 per cent
Natural rubber	70 per cent
Coffee, raisins, walnuts	100 per cent
Alcoholic beverages	150 per cent

The report also focused on medicines and food products. It said India keeps "very high" basic customs duties on drug formulations. This included life-saving drugs and finished medicines on the World Health Organisation list. It added, "High tariff rates also present a significant barrier to trade in other agricultural goods and processed foods (example poultry, potatoes, citrus, almonds, pecans, apples, grapes, canned peaches, chocolate, cookies, frozen french fries, and other prepared foods used in fast-food restaurants)," it added.

It also compared India’s bound rates with global levels. The report said India’s WTO bound farm tariffs are among the "highest" worldwide. It put the average at 113.1 per cent. It also said some lines go as high as 300 per cent. The report added India often changes surcharges on many farm items.

Alongside concerns, the report noted tariff reductions in the 2026 budget. It said applied duties fell across several sectors. The list included lifesaving medicines and select industrial inputs. It also covered EV and mobile battery materials and parts. It named lithium-ion battery scrap, cobalt powder, lead, zinc, electronics components, and mobile phone parts.

The report alleged frequent rate changes without public consultation. It said rates are set in the budget. It added rates can shift later through Gazette notifications. "The tariff rates are subject to numerous exemptions that vary according to the product, user, intended use, or specific export promotion program.This renders India's customs system both complex and open to administrative discretion," it said, while citing US complaints on inspections and seizures.

India import duties: non-tariff barriers and Quality Control Orders

On non-tariff barriers, the report listed import bans and licensing rules. It also cited customs hurdles and medical device price controls. Mandatory domestic testing and certification were also noted. "..the opaque and unpredictable nature of India's application of quantitative restrictions has affected the ability of US exporters to access the market.The United States, along with other trading partners, continues to raise India's application of quantitative restrictions at the WTO," it said.

It said India uses different rules for new goods and secondhand items. This includes remanufactured, refurbished, or reconditioned products. "US stakeholders have reported that obtaining an import license for remanufactured goods is onerous.US stakeholders noted excessive details are required in the license application, quantity limitations are set for specific parts, and long delays occur between the submission of an application and the granting of a license," it said.

Quality Control Orders were flagged for supply chain effects. The report said QCOs cover raw materials and intermediate inputs too. "The United States has concerns that BIS (Bureau of Indian Standards) standards are not fully aligned with international standards, and India has not demonstrated that international standards would be ineffective or inappropriate; often do not provide a means of establishing conformity or include significantly burdensome requirements; and lack clear timelines for transition periods and license validity," the report said.

It added some progress was reported on QCO processes. Yet it said restrictive orders still affect US exports. The report named medical devices, chemicals, electronics, cosmetic ingredients, and agriculture. It also said India lacks a single procurement policy. As a result, purchasing rules can differ across central ministries, adding compliance friction for suppliers.

The report also repeated points on intellectual property and services limits. "Foreign investment in businesses in certain major services sectors, including financial services and retail, is subject to limitations on foreign equity, and foreign participation in professional services is significantly restricted," it said. It added digital trade barriers, including for electronic payment providers, can spill into other services.

On internet access, the report cited localised shutdowns in recent years. It said disruptions can limit information and services. It added such events can affect business operations and digital economy trade. "The United States continues to monitor the impact of these events on US trade and investment, including services exports," it added.

The 2026 NTE report presented a mix of repeated concerns and newer budget-linked tariff cuts. It kept the focus on India import duties, plus licensing, QCOs, and customs procedures. India maintained that duties meet WTO rules. The report also continued to flag services, procurement variation, and digital trade risks linked to internet restrictions.