NewKerala.com

US Tariff Relief: How India Gains Small Edge in Agricultural Exports

The United States has removed several agricultural products from its reciprocal tariff regime. This exemption covers items like coffee, tea, tropical fruits and spices that either aren't produced sufficiently in the US or require specific climate conditions. India currently has a very small presence in the US market for these exempted products, exporting mainly high-value spices and niche items. While this could give India a slight competitive edge, major benefits are expected to go to larger agricultural exporters unless India scales up and diversifies its export basket.

Key Points: US Exempts Agri Products From Tariffs India GTRI Report

  • US exempts coffee, tea and tropical fruits from April tariff regime
  • India currently supplies only $548 million of US's $50.6 billion import basket
  • Indian exports concentrated in high-value spices and niche products
  • GTRI warns broader gains will go to Latin American and ASEAN exporters
2 min read

India may gain slight edge as US exempts several agri products from reciprocal tariffs: GTRI report

US exempts key agricultural goods from reciprocal tariffs, potentially giving India slight competitive advantage in spices and niche horticulture exports according to GTRI analysis.

"The shift in U.S. tariff policy could marginally strengthen India's competitive position in spices and niche horticulture - GTRI Report"

New Delhi, November 15

India is expected to gain a small edge as the US administration has exempted agricultural products from the reciprocal tariffs it had imposed on several countries, said trade think tank GTRI.

The United States has removed a set of agricultural products from the reciprocal tariffs introduced earlier this year, meaning these items will now face only the standard MFN duties.

A White House Executive Order issued on November 12 excludes coffee, tea, tropical fruits, fruit juices, cocoa, spices, bananas, oranges, tomatoes, beef and certain fertilizers from the April 2 reciprocal tariff regime, according to a Global Trade Research Initiative (GTRI) report put out on Saturday.

The exemptions took effect on November 13. These goods are either not produced in adequate quantities domestically or depend on climate conditions the US cannot replicate, GTRI has asserted.

For the tariff-exempt products identified in the order, India today supplies only USD 548 million of America's USD 50.6-billion import basket--reflecting a narrow export footprint dominated by a few winners, GTRI noted.

US' demand for these items is heavily concentrated in categories.

India's exports to the US are concentrated in a handful of high-value spices and niche products: pepper and capsicum preparations (USD 181 million), ginger-turmeric-curry spices (USD 84 million), anise and cumin seed categories (USD 85 million), cardamom and nutmeg (USD 15 million), tea (USD 68 million), and modest quantities of coconuts, cocoa beans, cinnamon, cloves, and fruit products.

"But India has almost no presence in several of the largest exempted lines--tomatoes, citrus fruits, melons, bananas, most fresh fruits, and fruit juices," GTRI noted. It's not clear yet whether Indian exports will be exempt from 25 per cent reciprocal tariffs or full 50 per cent tariffs.

"The shift in U.S. tariff policy could marginally strengthen India's competitive position in spices and niche horticulture, but the broader gains will accrue mainly to major Latin American, African, and ASEAN farm exporters unless India expands scale, builds cold-chain capacity, and diversifies its agricultural export basket," GTRI concluded.

- ANI

Share this article:

Reader Comments

R
Rohit P
Only $548 million out of $50 billion? That's barely 1%! We need to seriously work on diversifying our agricultural exports. We're missing out on huge opportunities in fruits and vegetables where we have natural advantages.
A
Anjali F
The GTRI report rightly points out our infrastructure gaps. Without proper cold chains and scale, we can't compete with Latin American countries. Government should focus on building these facilities in agricultural hubs.
M
Michael C
As someone in the export business, I appreciate this move. The uncertainty around whether it's 25% or 50% tariff exemption is concerning though. Clear communication from both governments would help exporters plan better.
S
Siddharth J
Our ginger, turmeric and curry exports are doing well! 🎯 This is where Indian cuisine's global popularity helps. We should leverage our cultural strengths more in international trade.
K
Kavya N
While this is positive, I'm concerned about small farmers. Often trade benefits don't reach them. Need better supply chain management and farmer-producer organizations to ensure equitable distribution of gains.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50