H1b dropbox stamping

My H1B petition was approved in Jan 2021, I qualify for dropbox as my previous H1b stamp expired in Aug 2020. However, I was living in India in June 2020 when the president proclamation was passed but I qualify for exemptions.
Please advise if I can go ahead and submit dropbox documents along with an
exemption letter or if I need to appear for an in-person interview.

You should submit as drop box case. Consulate will call you for interview if it wants.