US Considering Exemption from Section 301 Tariffs for India if Trade Deal Concludes Before July 24 Deadline

US Expected to Waive Additional Tariffs for India in Interim Trade Deal

The United States is likely to assure India that no additional tariffs under Section 301 will be imposed if the two countries conclude an interim trade agreement before July 24, when the current 10 percent baseline tariff window is scheduled to expire. According to a Business Standard report, citing an official aware of the US position, this assurance would provide a significant advantage to India.

Signing an interim deal before July 24 would mean that even if India is found to violate Section 301, the additional tariff would not be imposed. Instead, the tariff would remain at the pre-negotiated level of 18 percent. This is a more favorable outcome compared to other countries in violation of Section 301 and without trade deals, which would face much higher tariffs than the negotiated tariffs.

The development comes ahead of a four-day visit to New Delhi by Assistant US Trade Representative for South and Central Asia Brendan Lynch, who is also the chief negotiator for the proposed India-US Bilateral Trade Agreement (BTA). Lynch is expected to arrive with a team of US officials from Monday.

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According to the report, officials from both countries are expected to finalize details of the interim agreement and continue negotiations under the broader BTA framework. Discussions are expected to cover market access, non-tariff barriers, Customs and trade facilitation, investment promotion, and economic security alignment.

India's negotiating team is being led by Darpan Jain, additional secretary in the commerce department. Jain had earlier led a delegation to the United States in April for trade discussions.

The two sides are close to resolving several non-tariff barriers, including some US concerns related to digital trade, which may be addressed as part of the interim agreement.

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An official cited by Business Standard also indicated that the agreement is likely to be signed in New Delhi, suggesting a possible visit by United States Trade Representative Jamieson Greer.

The proposed understanding comes against the backdrop of the United States' use of Section 301 investigations into allegations involving structural excess manufacturing capacity and the use of forced labor. The investigations are being viewed by trade officials and policy observers as an alternative mechanism after reciprocal tariffs imposed by the Donald Trump administration under the International Emergency Economic Powers Act (IEEPA) in April 2025 were struck down by the US Supreme Court in February.

Section 301 of the US Trade Act allows Washington to investigate and respond to foreign trade practices it considers discriminatory or unreasonable. The provision has previously been used in trade disputes involving China and other major trading partners.

The current 10 percent baseline tariff was temporarily applied to trading partners during a 90-day transition period and is scheduled to expire on July 24 unless revised or extended.

Senior US officials have in recent weeks publicly indicated progress in the India-US trade negotiations. US Secretary of State Marco Rubio said last week that the two sides were "down to very final details" on the interim arrangement. Separately, US envoy to India Sergio Gor said on May 29 that only "one percent" of the negotiations remained pending.

India and the United States have been working toward a broader Bilateral Trade Agreement after both sides relaunched discussions on market access and tariff issues over the past year. Trade negotiations between the two countries had previously slowed following disagreements over digital services taxes, agricultural access, medical devices pricing, and tariff treatment on industrial goods.