India wins relief from US ‘national security’ tariffs; opens market wider for American goods

India has secured key concessions from the United States on so-called ‘national security’ tariffs covering aircraft and aircraft parts, automotive components and generic pharmaceuticals, even as it agreed to significantly widen market access for American industrial, agricultural and technology goods, according to a joint India-US statement released recently.

The concessions relate to tariffs imposed under Section 232 of the US Trade Expansion Act, a powerful trade provision that allows Washington to levy duties on imports deemed a threat to national security.

While the statement did not spell out the precise tariff reductions, it confirmed that India will receive preferential treatment on selected aircraft and aircraft parts, a tariff-rate quota for automotive components, and negotiated outcomes for generic pharmaceuticals and ingredients, subject to the findings of an ongoing US investigation.

In return, India has committed to eliminating or reducing tariffs on all US industrial goods and a “wide range” of food and agricultural products. These include dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, among other items. New Delhi has also agreed to address long-standing non-tariff barriers affecting US food and agricultural exports.

Why Section 232 matters

The Section 232 relief is particularly significant because it sits outside the scope of current legal challenges in the US Supreme Court questioning President Donald Trump’s authority to impose reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA). Unlike reciprocal tariffs, Section 232 measures enjoy stronger legal backing, with US courts historically reluctant to intervene on matters framed as national security.

The Trump administration has used Section 232 to impose sector-specific tariffs on products such as steel, aluminium and copper, arguing that excessive imports threaten domestic supply chains critical to national security.

Under the joint statement, the United States will remove tariffs on certain Indian aircraft and aircraft parts imposed on national security grounds. India will also receive preferential tariff-rate quotas for automotive parts covered under Proclamation 9888 of May 17, 2019, which governs auto and auto-component imports into the US. For pharmaceuticals, India is set to receive negotiated outcomes for generic drugs and ingredients, contingent on the conclusions of the Section 232 investigation currently underway.

Big-ticket purchases and safeguards

The statement further said India “intends” to purchase $500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology goods and coking coal over the next five years. However, both sides retained an escape clause, agreeing that any change in agreed tariff structures would allow the other country to modify its commitments.

GPUs, data centres and tech trade

With India announcing a tax holiday for data centres, the two countries also agreed to sharply increase trade in technology products, including graphics processing units (GPUs) and other equipment critical for data centre infrastructure. The statement emphasized expanded cooperation in advanced technologies as part of the broader trade reset.

India also committed to tackling non-tariff barriers affecting bilateral trade, including long-standing issues related to US medical devices. It agreed to eliminate restrictive import licensing procedures that delay or limit market access for US information and communication technology (ICT) products, and to review—within six months of the agreement’s entry into force—the acceptance of US or international standards and testing requirements for identified sectors.

Taken together, the agreement signals a calibrated trade bargain: targeted tariff relief for India in sensitive sectors, in exchange for deeper access to one of the world’s fastest-growing markets for US industrial, agricultural and high-technology exports.