Indian drone manufacturers have been left outside a new US preferential tariff regime signed by President Donald Trump on Thursday, 14 August, potentially exposing India-made unmanned aircraft and components to duties as high as 100 per cent. The proclamation, framed as a national security measure, grants lower tariff rates to a select group of partner economies — a list that does not include India.

Who Made the Cut — and Who Did Not

Under the new framework, eligible drones and components from the European Union, Japan, Liechtenstein, South Korea, Switzerland, and Taiwan will face a maximum tariff of 15 per cent. Products from the United Kingdom receive an even more favourable cap of 10 per cent. India features nowhere on this list, meaning Indian exporters will be subject to the general tariff schedule rather than the concessional rates.

The concessions apply only when substantially all critical components and technology originate in the United States or one of the listed partner economies, with the Commerce Department tasked with verifying individual product eligibility.

Tariff Rates and What They Cover

The proclamation introduces a tiered duty structure based on drone weight and capability. Drones weighing more than 25 kilogrammes, drones equipped with thermal imaging, docking stations, and certain critical components will attract a 100 per cent tariff. Specified parts used in larger drones will also face the higher rate, with exceptions carved out for components intended for retail delivery, agriculture, or sale to the Department of War.

Smaller drones — those weighing 25 kilogrammes or less and lacking thermal imaging — will face a 25 per cent duty. The principal tariffs are scheduled to take effect on 3 September. Certain additional drone components will attract a 25 per cent tariff from 9 February 2027, with the delayed implementation designed to allow domestic US production capacity to scale up.

These duties will generally be levied in addition to other applicable tariffs, taxes, fees, and charges already in force. Products on specified Department of War and Federal Communications Commission-approved lists will receive a 180-day implementation delay.

The National Security Rationale

The Commerce Department's investigation underpinning the proclamation found that the United States relied heavily on foreign suppliers for motors, electronic speed controllers, lithium-ion batteries, and docking stations. Investigators also flagged the risk that software embedded in imported drones could transmit sensitive data to overseas manufacturers — a concern that has driven bipartisan scrutiny of drone supply chains in Washington over recent years.

The measure does not name India or impose an India-specific tariff; India's exclusion is a consequence of its absence from the preferred-partner list rather than any targeted action.

A Path In — Through US Manufacturing

The proclamation does offer one route for Indian companies willing to invest in American soil. An onshoring programme authorises companies building, refurbishing, or expanding US manufacturing facilities to import covered products, supply-chain inputs, and necessary production equipment free of the new Section 232 duties while construction is under way. Any approved plan must include a commitment for construction to commence before 20 January 2029. The Commerce Secretary may also expand the tariff regime to additional components if their imports are found to threaten national security or undermine the new measures.

With bilateral trade talks between India and the United States ongoing, Indian drone exporters and industry bodies will be watching closely whether New Delhi can negotiate inclusion in future rounds of the preferred-partner framework before the 3 September deadline arrives.