Tariff cut by Trump brings major relief to Indian exporters
Trump’s decision to scrap 50 pc tariffs on 200 agri and processed food products brings relief to Indian exporters of spices, tea, coffee, nuts and essential oils
After US President Donald Trump announced the decision to lower the tariffs on more than 200 food, agri and farm products, processed foods, Indian businessmen believe it will give them a boost in trade, particularly focusing on diaspora-driven demands.
Exports of agricultural products, processed foods, spices, and other items to the American market faced difficulties after the Trump administration imposed a 50 per cent tariff on Indian goods in August.
Trump’s decision
On Friday (November 14), the US released a revised list, Annexure II, of goods exempted from country-specific reciprocal tariffs. The variety of spices in the list, including black pepper, cardamom, cumin, turmeric, ginger, tea, cloves, nuts like cashews, and mango-based products, is mainly exported from India.
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The announcement on November 14 gave farmers, exporters and traders relief by effectively reducing import duties on products such as coffee, tea, fruits, nuts, spices, and essential oils.
Trump's decision came amid growing concerns over the cost of living across his country. This disquiet among the people was reflected in the recent by-elections and had become the centre point of debate during the election campaigns. "Higher consumer prices" was one of the factors attributed to Democrats' win in Virginia, New Jersey, and other prominent seats.
Multimillion-dollar business
Reports say that India exported $500 million worth of spices to the US in 2024. In the same period, India exported tea and coffee to the US worth nearly $83 million. The US, in 2024, imported $843 million worth of cashews, with India accounting for 20 per cent of the imports.
Experts believe that reducing import duties will level the playing field for exporters who have been adversely affected by higher tariffs. While the value of exports may not seem large, they hold significant importance for India's labour-intensive agriculture sector.
Newly announced exemptions cover 254 new products, including 229 agri goods, representing over $1 billion of India’s exports to the US. According to reports, India exports 48 types of fruits and nuts to the US. Last year, these products accounted for $359 million worth of exports.
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It also exports 50 processed food items including coffee and tea extracts, cocoa preparations, juices, fruit pulps, mango-based products and vegetable waxes to America. Last year, these 50 processed food products accounted for $491 million in business.
India exports spices worth $358.66 million, and 12 types of tea and coffee products worth over $82.5 million to America. Now, under the new product category, essential oils get zero-duty.
It is to be noted that tariff-exempted products were estimated at around 40 per cent of India’s total goods exports last year worth $86 billion.
50 pc tariff remains for these items
However, the exemption was not given to Indian seafood, including shrimp and basmati rice, which make up a significant share of India’s exports to the US. Goods like Indian gems, jewellery, and apparel still attract a 50 per cent US tariff.