India Secures Tariff Exemptions On 45% Of US Exports Under Section 301

India’s Ministry of Commerce and Industry confirmed that 45% of total Indian exports to the United States are currently exempt from new Section 301 tariffs, which took effect on July 24. The remaining 55% of goods face a 10% duty, which is notably lower than the 12.5% applied to several other global economies. Crucially, key sectors such as generic pharmaceuticals and smartphones remain completely excluded from these additional levies. Furthermore, products already subject to Section 232 trade measures, specifically steel and aluminum, are unaffected.

The United States enacted these duties under the U.S. Trade Act of 1974 following an investigation into forced labor enforcement across 60 economies. India mitigated financial penalties by issuing a formal prohibition notification on July 13, successfully reducing the proposed duty from 12.5% to 10%. This regulatory alignment positioned India among 17 nations, including the United Kingdom and Malaysia, securing a lower threshold and providing a comparative advantage over competitors like China, Vietnam, Thailand, and Türkiye.

While the exemption for tech and pharmaceutical products provides relief, India failed to secure textile and apparel quota exemptions, which remain exclusive to regional competitors using US-origin cotton. The Ministry of Commerce is pursuing further diplomatic talks regarding textile mechanisms. Domestic exporters of the remaining 55% of goods must navigate these standards or absorb the 10% duty to maintain their American market share.