Indian drone manufacturers have been excluded from a preferential US tariff regime that offers lower duties to selected trading partners…reports Asian Lite News Desk
Indian drone manufacturers have been left outside a preferential US tariff regime that gives selected partners lower rates, potentially exposing India-made unmanned aircraft and components to duties of up to 100 per cent.
US President Donald Trump signed the proclamation on Thursday, citing what the White House described as a national security threat arising from US dependence on imported drones and their components.
The measure does not specifically name India or impose a tariff targeting Indian products. However, India is not included among the countries whose qualifying drone products will receive preferential tariff rates.
Eligible drones and components from the European Union, Japan, Liechtenstein, South Korea, Switzerland and Taiwan will face a maximum tariff of 15 per cent. Qualifying products from Britain will be subject to a maximum rate of 10 per cent.
The lower rates will apply only to products meeting strict origin requirements, including where substantially all critical components and technology come from the United States or one of the designated partner economies.
The US Commerce Department will determine whether individual products qualify for the preferential treatment.
Indian products that do not qualify for another exemption or an approved onshoring arrangement will instead be subject to the general tariff rates set out under the new regime, depending on factors including their weight, capabilities and classification.
A 100 per cent tariff will apply to drones weighing more than 25 kilogrammes, drones equipped with thermal imaging, docking stations and certain critical components. Specified parts used in larger drones will also be subject to the higher duty.
The tariff annexes provide exemptions for certain components intended for retail delivery, agricultural applications or sale to the US Department of War.
Smaller drones weighing 25 kilogrammes or less and without thermal imaging capabilities will face a 25 per cent tariff.
The main tariffs are scheduled to take effect on September 3, while certain additional drone components will face a 25 per cent duty from February 9, 2027. The delayed implementation is intended to allow US manufacturers additional time to expand domestic production.
The new duties will generally apply in addition to other tariffs, taxes, fees and charges that may already be applicable to the products.
Certain products appearing on specified Department of War and Federal Communications Commission-approved lists will receive a 180-day delay in implementation.
The Commerce Secretary has also been authorised to add further components to the tariff regime if imports are determined to pose a national security risk or undermine the objectives of the new measures.
The proclamation provides another potential route for Indian drone companies willing to establish manufacturing operations in the United States.
It authorises an onshoring programme for companies building, refurbishing or expanding facilities in the US. Approved companies may import covered products, supply-chain inputs and necessary production equipment without paying the new Section 232 duties while their facilities are under construction.
However, participating companies must commit to completing construction before January 20, 2029.
The US Commerce Department’s investigation found that the country remains heavily dependent on foreign suppliers for key drone components, including motors, electronic speed controllers, lithium-ion batteries and docking stations.
The investigation also raised concerns about the potential for software installed on imported drones to transmit data to overseas manufacturers, adding a cybersecurity dimension to the national security concerns cited by Washington.
The new tariff regime could therefore create additional costs for Indian drone manufacturers seeking to access the US market, while encouraging companies to establish or expand production within the United States.
For Indian manufacturers, the absence of India from the preferential group means their products could face significantly higher duties than qualifying products from several US partner economies.
