US Tariff Exemption Covers $28.4 Bn of Indian Exports

The order, effective from Monday, grants exemptions to trading partners with framework pacts to reduce “reciprocal” tariffs on 45 categories of industrial goods, including nickel, gold, pharmaceutical compounds, and chemicals.

According to the Global Trade Research Initiative (GTRI), India’s exports of the newly exempt products were negligible in 2024. “India’s shipments in these newly exempt items totaled just $15.2 million in 2024—a negligible share of its overall exports to the US,” GTRI said. Combined with previously exempt goods, the tariff-free total now stands at $28.4 billion, or 31.3 per cent of India’s $91.2 billion exports to the US in 2024.

US trade data pegs India’s exports at $91.2 billion last year, slightly higher than India’s calculation of $86.5 billion in FY25. Differences stem from variations in HS (Harmonised System) codes used by both countries.

Among the newly exempted items:

• Nitrile compounds ($6.1m) – used in pharmaceuticals and agrochemicals

• Nickel waste and scrap ($3.5m) – recycled into stainless steel and batteries

• Lidocaine ($2.4m) – local anesthetic

• Nickel powders ($1.2m) – catalysts, 3D printing

• Nickel flakes ($0.5m) – conductive coatings

• 3-amino methoxy benzanilide ($0.46m) – intermediate for pharmaceuticals and dyes

• Imidazole ($0.35m) – antifungal and anticancer drug building block

• High-purity precious metal articles ($0.25m) – bullion, electronics

“The changes highlight Washington’s use of tariffs as a trade and security tool but confirm that the commercial implications remain minimal for India given the very limited volumes of the newly exempt products,” GTRI noted.