According to Bloomberg's report on July 26 local time, the Indian government recently stated that after starting trade negotiations with the United States, India has been placed in a category with lower additional tariffs, thereby gaining an advantage for the country's key export products.
The Indian Ministry of Commerce and Industry issued a statement on July 25 local time, stating that a significant portion of India's exports to the United States (including generic drugs and smartphones) continues to be exempt from the additional 10% tariffs announced last week. The statement also indicated that India is working towards reaching a bilateral trade agreement as soon as possible.
The ministry stated that products such as steel, aluminum, and automotive parts are also not affected by this 10% additional tariffs. Thanks to these exemptions, approximately 45% of India’s exports to the US are not subject to additional taxation.
The statement read: "The remaining 55% of exported products will face an additional 10% tariff, but compared to most economies affected by this investigation, the tariff burden borne by India is relatively low."
However, despite the statements made by the Indian government, President Donald Trump's plan to impose high tariffs on generic drugs has caused concerns among Indian pharmaceutical companies. This has drawn attention to the strategies these companies are using in their largest export market.
On July 21 local time, Trump posted on social media that the United States plans to impose a 100% tariff on imported generic drugs starting from August 2028. One year later, in August 2029, the tax rate will double to 200%.
And prior to that, the United States will continue to impose zero tariffs on imported generic drugs.
Bloomberg reported that the United States and India have been negotiating a trade deal since last year. Although they reached an initial trade agreement in February of this year (which involved tariffs on US goods being levied at 18% for Indian products), a subsequent ruling by the U.S. Supreme Court invalidated Trump's "reciprocal tariff" system.
In late June this year, during a visit by U.S. Trade Representative Gary Locke to India, the two sides were unable to finalize a temporary trade agreement. This month, Reuters reported that an Indian government official who was familiar with the negotiations stated that due to the U.S. failing to provide guarantees regarding India’s core demands, the two sides did not reach an agreement.
Reports indicate that India's key demands include: India should have advantages in terms of tariff treatment compared to competitors like China, and the United States should not impose new tariffs on India after the agreement is signed.
