How Indian Exporters Can Offset Trump Tariffs Using US Foreign-Trade Zones

Posted by Written by Archana Rao Reading Time: 5 minutes

Amid mounting global trade tensions following the United States’ introduction of a reciprocal tariff regime, India has moved swiftly to safeguard its exporters. On April 11, 2025, the country launched a new trade help desk to help Indian domestic businesses navigate the evolving global trade landscape.

As Indian exporters reassess their strategies for accessing the US market, the current tariff framework presents strategic openings through the US’s Foreign-Trade Zone (FTZ) system.

Amid escalating global trade uncertainties triggered by the US’s imposition of new tariffs, India’s Union Ministry of Commerce and Industry announced the launch of a dedicated trade helpdesk on April 11, 2025, designed to guide domestic businesses through the shifting global trade landscape.

This comes after US President Donald Trump’s April 9, 2025, announcement pausing the reciprocal tariffs for 90 days for over 75 countries, including India. The decision, however, does not cover the 10 percent base tariff, which came into effect on April 3, 2025.

Meanwhile, industry analysts have noted that the US’s FTZs could offer Indian exporters some temporary relief, allowing them to ship goods under the standard 10 percent baseline tariff with minimal economic impact.

DGFT’s global tariff and trade helpdesk

India’s Directorate General of Foreign Trade (DGFT) has rolled out the Global Tariff and Trade Helpdesk, an online platform to act as a central point of contact for Indian exporters and importers to seek suggestions and address concerns on the trade dynamics.

As per DGFT’s official announcement, the help desk will address a broad range of concerns, such as the following:

  • Challenges in exports or imports.
  • Sudden surges in imports or cases of commodity dumping.
  • Delays in EXIM clearance processes.
  • Disruptions in supply chains or logistics.
  • Financial, banking, or transactional constraints.
  • Compliance with evolving global regulatory requirements.

It is intended to enhance coordination between trade stakeholders and the central government agencies, ensuring that policy responses remain aligned with on-the-ground trade developments.

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Steps to submit trade-related concerns to the central government

Interested stakeholders can register their concerns with India’s central government by following these steps:

  1. Visit the DGFT official website. Click here: https://dgft.gov.in
  2. On the homepage, go to the Services section and select DGFT Helpdesk Service.
  3. Click on the tab Create a New Request.
  4. Log in using registered trader credentials and select the category ‘Global Tariff and Trade Issues.’
  5. Choose the appropriate subcategory (for example, import/export issues, dumping, logistics, or regulatory matters).
  6. Fill in the relevant details and submit the request.

Alternatively, businesses can also submit their concerns via email to dgftedi@nic.in with the subject line ‘Global Tariff and Trade Helpdesk’ or by calling the DGFT toll-free number: 1800-111-550.

Users can track the progress of their submissions via the helpdesk portal, with regular updates shared through email and SMS notifications.

Identifying US tariff exemptions under the new policy

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Indian exporters may still find some relief through specific exemptions built into the US reciprocal tariff framework. A report released by the Global Trade Research Initiative (GTRI) on April 11, 2025, notes that Trump’s decision to halt the imposition of reciprocal tariffs (26 percent for India) can bring temporary relief to Indian exporters and provide them with a competitive edge. The latest measure can have a significant impact on key sectors like textiles, leather, engineering goods, and electronics, where Indian manufacturers often go head-to-head with Chinese suppliers.

Trump’s additional executive order, issued on April 9, 2025, titled “Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment,” supported by updated instructions from US Customs and Border Protection (CBP). These guidelines detail several key exemptions designed to ease the impact of the new tariffs on global exporters.

Importantly, not all goods will be affected equally by the new tariff structure introduced under Trump’s April 9 directive. The CBP’s guidance outlines notable carve-outs, such as the following:

  • US Content Rule: If a product contains at least 20 percent US-origin components, only the value of the non-US portion will be subject to duties—provided the composition is clearly declared and documented.
  • In-transit goods: Shipments that were already in transit before April 5 and arrive in the US by May 27, 2025, will be exempt from the new tariffs. Meanwhile, goods shipped between April 5, 2025, and April 9, 2025, will incur only the baseline tariff of 10 percent, avoiding harsher, country-specific rates.
  • US FTZs: Indian goods entering the US through FTZs after April 9, 2025, must be admitted under “privileged foreign status.” This classification ensures that duties are assessed based on the product’s status at the time it enters the zone, not the domestic market. For Indian exporters, this provides strategic flexibility—allowing them to defer or potentially reduce duties depending on shifting market conditions and supply chain needs.

The FTZs are specific areas located near US ports of entry that offer businesses a range of customs-related advantages. These zones are considered outside the jurisdiction of US Customs for the purposes of duty assessment, allowing companies to import, store, and process goods with either reduced or no customs duties, taxes, or fees.

FTZs typically fall within a 60-mile radius of a designated US port of entry and operate under the supervision of the US FTZ Board and US Customs and Border Protection (CBP). There are two main categories of FTZs:

  1. General Purpose FTZs and.
  2. Special Purpose FTZs, also known as subzones.

By utilizing general-purpose FTZs, Indian businesses can reduce lead time, enhance responsiveness to US customer demand, and minimize warehousing costs. For large-scale exporters, setting up dedicated subzones may also be an attractive long-term strategy.

Opportunities for Indian exporters in the US FTZs

The US FTZ system presents a valuable opportunity for Indian exporters seeking to maintain trade competitiveness. By leveraging FTZs, Indian companies can substantially reduce the landed cost of their goods, gain smoother access to the US market, and create a strategic advantage over exporters from countries subject to higher tariffs.

Indian exporters whose goods are routed through US FTZs can benefit from deferred customs duties until the goods officially enter the US domestic market. In certain cases, if the goods are re-exported from the FTZ without entering the US’s local market, no duties are levied at all.

READ: Import and Export Procedures in India

Indian exporters can also collaborate with US-based logistics providers, distributors, and manufacturers operating within FTZs to enhance their supply chain efficiency.

Leveraging competitive edge amid rising tariffs

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With the imposition of steep reciprocal tariffs on key global competitors like China, Vietnam, and Bangladesh, Indian exporters—especially in sectors like textiles, electronics, and auto components—can use FTZs to mitigate tariff disadvantages and improve market penetration. Goods with at least 20 percent US-origin components can also enjoy partial duty or complete exemption, creating further opportunities for Indian firms that partner with US suppliers or include US-made components in their products.

Conclusion

In response to the evolving global trade environment shaped by the US’s new reciprocal tariff regime, India’s support to its exporters can not only provide immediate relief—such as the temporary 10 percent flat duty and key tariff exemptions—but also open long-term opportunities for Indian businesses to strengthen their competitiveness in the US market. By leveraging FTZ benefits, aligning with US content rules, and utilizing policy support, Indian exporters are well-positioned to navigate the current challenges and capitalize on emerging trade openings.

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