Trump's new tariffs may still leave over $34 billion of Indian exports duty-free

Tariff's to leave $34 billion of trade open

• $34B of Indian exports to US may remain tariff-free
• Pharma, electronics, and aviation lead exemption list
• Top 10 exempted categories make up 70 percent of duty-free trade

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Fresh tariff measures proposed by US President Donald Trump following the American Supreme Court’s decision to strike down reciprocal tariffs may still leave more than $34 billion worth of Indian exports to the United States outside the duty net, according to a Moneycontrol analysis of trade data.

Total US imports from India stood at about $87.7 billion in 2024, of which roughly $34.27 billion may remain exempt under the revised tariff framework. Within this, civil aviation-related exemptions alone account for approximately $5.77 billion.

The proposed tariff measures under Section 122 of the Trade Act of 1974, which allows the US president to impose duties of up to 15 percent for up to 150 days, reportedly preserve exemptions for pharmaceuticals and electronics while adding new carve-outs such as civil aviation products. These exemptions were under negotiation as part of the interim trade discussions between India and the US, scheduled for conclusion in March. Similar exemptions had earlier been extended to Japan, the European Union and the United Kingdom in separate trade negotiations.

What’s exempted?

The top 10 exempted product categories account for nearly $24 billion, or about 70 percent of all duty-free trade under the proposed structure.

Pharmaceuticals dominate the list. Medicaments in dosage form packaged for retail alone account for over $10.6 billion in exports. Antibiotic formulations, hormone-based medicines and immunological products also feature prominently, reflecting India’s established position as a major supplier of generic medicines and pharmaceutical inputs.

Electronics and telecom equipment represent the next-largest segment. Smartphone exports amount to nearly $6.8 billion, while communication transmission equipment contributes over $1.8 billion, highlighting India’s expanding electronics manufacturing footprint.

Petroleum products and engineering goods also form a sizeable portion of the exempted trade. Refined petroleum exports, including motor fuels and aviation fuel, remain significant. Industrial goods such as static converters, engine components, pumps, compressors, and other machinery parts are featured on the exemption list.

While broader tariff measures may erode the advantage in certain sectors, the continued exemption of pharmaceuticals, electronics and energy products ensures that a substantial portion of India’s high-value exports to the US remains shielded from immediate duty escalation.