A fifth of India’s exports open to US exemptions: Pharma, zinc, copper and chemicals to benefit

A fifth of India’s exports open to US exemptions: Pharma, zinc, copper and chemicals to benefit

The exemptions granted by the US in its order to impose reciprocal tariffs across nations will likely shield around a fifth of exports from India from high tariffs, according to a Moneycontrol analysis of UN COMTRADE data.

Of the $91 billion worth of India’s exports to the US, nearly $20 billion are expected to come under some form of exemption granted as per the executive order; the chief among them is the pharmaceutical industry, where nearly the entire trade would be exempt from high tariffs.

The exemption levels in the case of zinc, tin and copper exports are also over 95 percent. However, in terms of electronics, which are the top export item from India, exemptions would cover only 0.6 percent of trade.

The US imported nearly $14.4 billion worth of items from India, as per UN COMTRADE numbers, of which only $86 million would have been open to exemption.

However, India may still gain from the imposition of 26 percent tariffs in the short term, as China and Vietnam, its two biggest competitors in the field, attracted higher tariffs.

US President Donald Trump on Wednesday imposed a baseline tariff of 10 percent and variable tariffs ranging between 20 and 49 percent on countries. China, for instance, would face an additional duty of 34 percent, over and above the 20 percent imposed on some products. Vietnam is expected to attract 46 percent tariffs.

The US alleges that the total trade distortion from India, including non-tariff barriers and other measures, was 52 percent. Trump noted that he was offering discounted tariffs amounting to half the value charged by them.

In terms of imports, 20 percent of trade reaching North American shores is expected to avoid exemptions. US’ imports were to the tune of $3.4 trillion in 2024, excluding some oil products.

But India is not the only beneficiary, among the BRICS peers South Africa’s 35 percent trade is likely to be exempt from reciprocal levies, whereas a third of trade from Israel is expected to escape levies.

Ireland will escape duties on 75 percent of exports, Chile on 45 percent.

European peers are likely to be more disadvantaged, as Germany and France will escape reciprocal tariffs on 16 and 14 percent of exports.

Japan, which Trump repeatedly mentioned in his address on April 3, will be able to escape tariffs on just 10 percent of its trade.