Chapter 4 · Lesson 284 min read

Duty in export markets

Why the duty your buyer pays matters to you, how MFN and preferential rates differ, and what GSP, DCTS and extra duties like Section 301 change.

A container truck at a foreign port gate with a toll booth and coloured price tags.

Why your buyer's duty is your problem

Under every Incoterm except DDP, the buyer pays the import duty in their own country. That duty becomes part of their cost, so it decides whether your price can beat a competitor's from another country. If your buyer pays 10% on goods from India and nothing on the same goods from a competitor, you start 10 points behind. Ask your buyer what they expect to pay as well: they often know their own tariff well.

Each country sets duty on its own national tariff lines, but the first 6 digits, the product type, are the same everywhere. So compare markets at 6 digits, then check the country's own lines under it, because the rate can differ from line to line.

MFN and preferential rates

Every WTO member has a standard rate for each product, the MFN rate. It applies to goods from other WTO members unless something gives them a lower rate.

A preferential rate is lower. It comes from a free trade agreement or a scheme for developing countries, and it applies only when the goods meet the rules of origin and the importer has the proof the scheme asks for, often a certificate of origin.

Example: what the rate means in money (illustrative rates and value)
  • Your buyer imports goods with a customs value of US$20,000.
  • At a standard rate of 10%, the duty is 20,000 × 10% = US$2,000.
  • With a preference for India at 4%, it is 20,000 × 4% = US$800.
  • A competitor whose country has a trade agreement at 0% pays nothing.
  • Against that competitor, the preference cuts your gap from US$2,000 to US$800 on every such order.

Schemes that come and go: GSP and DCTS

GSP and DCTS are schemes in which richer countries charge less duty on goods from developing countries. They are one-sided: the importing country decides, and it can change or withdraw them.

  • The US ended India's GSP benefits in 2019.
  • The EU has suspended its GSP preference for several groups of Indian products from 1 January 2026 to 31 December 2028, among them textile materials, because its imports of them passed the scheme's limits.
  • The UK-India trade agreement entered into force on 15 July 2026. India leaves the UK's DCTS on 15 July 2028, and until then businesses can claim either.

Watch out: A preference listed for your code is not automatic. Your buyer gets it only if the goods meet the rules of origin and the right proof reaches them in time. Agree with the buyer, before you ship, which preference they will claim and which document they need from you.

Extra duties on top

Some countries add duties on top of the normal rate. Under Section 301, the US Trade Representative imposed a 10% duty on products of India entered from 24 July 2026, with listed exemptions. Anti-dumping and countervailing duties abroad can also apply, sometimes only to named exporters.

Extra duties change faster than normal rates. Check them every time you quote, not once a year, and keep the date you checked next to the rate you used.

Using the Duty in export markets tool

  1. Enter your HS code. The tool compares at 6 digits, the level every country shares.
  2. Read each market's rate on goods from India: the US, the UK, the EU and Australia.
  3. Open 'How India's rate is made up' to see the standard rate, any preference and any extra duty, each with its legal basis.
  4. Open 'Compare with' to see what competing countries pay. Gaps are in percentage points: 12% against 9.5% is 2.5 points.
  5. Read 'Before you rely on this' for the market's notes, then the national tariff lines under your code.

In short

  • Your buyer's import duty is part of their cost, so it shapes whether your price can win.
  • Compare markets at 6 digits, then check the country's own tariff lines.
  • MFN is the standard rate; a preferential rate needs the rules of origin met and the proof in hand.
  • GSP and DCTS are one-sided schemes that change; extra duties such as Section 301 sit on top.
  • Check the current rate every time you quote.

Try it on our data

Check yourself

Check yourself 1

1.Your buyer pays 10% duty on your goods and 0% on a competitor's. What does that mean for you?

Check yourself 2

2.When does a preferential rate actually apply?

Check yourself 3

3.Why compare duty across countries at 6 digits?

Words in this lesson

Sources

Facts checked against these sources on

Trade Academy is education, not legal, tax or customs advice. Rules and rates change by notification: check the live source, or ask a licensed customs broker, before you act.