Indian agricultural exporters received unexpected, good news after US President Donald Trump rolled back tariffs on dozens of food items between the United States and India. The decision comes as American consumers are concerned about rising grocery prices.
Trump’s rollback applied to tariffs on more than 200 food items, including beef, reversing disproportionate tariffs placed by the Trump administration under reciprocal tariffs. Indian exporters were particularly excited about the rollback of tariffs, since they faced stiffer tariffs than EU and Vietnamese suppliers. Under Trump’s tariff regime, tariffs on certain Indian food products were raised to as high as 50%. Trump also instituted a 25% tariff on food items linked to India’s purchases of Russian oil.
Expecting Billions in Sales
Ajay Sahai, director general of the Federation of Indian Export Organisations, believes Indian exporters can gain $2.5 – 3 billion, noting that the tariff relief “opens space for premium and value-added products,” especially for exporters who shift towards higher-margin segments.
Officials involved in agriculture export policy and trade policy, deemed the rollback a positive indication regarding ongoing US–India trade negotiations. They believed a rollback of tariffs would tence some of the pressure created by the earlier tariff increases, which had a significant negative impact on Indian agricultural exports. India exported approximately $5.7 billion in agricultural products to the United States in 2024, and this was an important part of India’s overall exports of about $87 billion.
Limited Gains in Important Goods
Nevertheless, some analysts cautioned that any potential gains could remain limited in some circumstances. Ajay Srivastava from the Global Trade Research Initiative said India had a weak presence on some of the exempted items, for example citrus fruits, melons, and tomatoes. He added India would mainly benefit from spices, cashew nuts, and niche horticulture. He went on to say that higher and better advantages may accrue to Latin American, African, and ASEAN suppliers.
Exporters Remain Obstacles
In spite of offering relief on some tariffs, exporters remain somewhat sceptical. Several exporters cited high freight costs, strong Vietnamese and Indonesian competition, and tighter US stringent quality standards.
“Tariff relief is good; however, a recovering market remains contingent on logistics and pricing,” explained one exporter.
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