More than 40% of India’s exports to the United States already enter the market duty-free, highlighting the limited immediate tariff exposure for a large share of bilateral trade, according to trade officials and industry assessments.
Key export categories benefiting from zero or minimal duties include pharmaceuticals, IT and business services-linked goods, select engineering products, chemicals, and segments of textiles and handicrafts. Preferential access under US tariff schedules and long-standing product-specific exemptions have helped Indian exporters maintain competitiveness despite the absence of a bilateral free trade agreement.
The duty-free share offers India a buffer amid ongoing global trade uncertainty and tariff debates, particularly as New Delhi and Washington continue discussions on deepening economic engagement. However, exporters note that the remaining tariff-exposed portion—especially in labour-intensive sectors such as apparel, leather goods, gems and jewellery, and certain agricultural products—still faces cost pressures.
Industry bodies say expanding duty-free coverage through a limited trade deal or sector-specific arrangements could significantly boost India’s export growth to the US, which remains its largest trading partner. In 2024–25, bilateral trade in goods crossed $120 billion, with India maintaining a trade surplus.
Policy experts add that simplifying compliance requirements and addressing non-tariff barriers such as standards, certifications, and customs procedures could further enhance market access, even without sweeping tariff cuts. As talks continue, the existing duty-free window is expected to remain a key pillar supporting India’s export momentum to the US.
