Some good news on US tariffs for India: How Trump's new exemptions for food will help farmers
According to some officials involved in trade and farm export policy, the move comes as an optimistic sign amid the ongoing trade talks between India-US.
United States President Donald Trump’s decision to exempt several food and agricultural items from his reciprocal tariffs has come as a much-needed relief for Indian agricultural exporters as, according to some analysts, this could help to revive lost demand, reported news agency Reuters.
Products such as coffee and tea, tropical fruits and fruit juices, cocoa and spices, bananas, oranges, tomatoes, beef, and additional fertilizers are no longer subjected to the reciprocal tariffs announced to Trump earlier this year.
Among the exempted items are several products that India exports to the US.
The exemption will help Indian exports of products such as tea, coffee, spices and cashew nuts who were hit hard when Trump announced 50 per cent tariffs on Indian exports, half of which came as a penalty for buying oil from Russia.
Also read: US cuts tariffs on over 250 food products: How it impacts Indian exports?
Among the products that the United States imports from India are 48 types of fruits and nuts and 50 processed food products. India also exports all spices to the US except Thyme.
What experts say
The tariff exemptions will benefit exports worth between $2.5 billion and $3 billion, said Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO), according to the Reuters report.
"This order opens space for premium, speciality and value-added products…Exporters who shift towards higher-value segments will be better protected from price pressures and can tap rising consumer demand,” the report quoted Sahai as saying.
According to some officials who are involved in trade and farm export policy, these exemptions come as an optimistic sign amid the ongoing trade talks between India and the US.
"The move benefits Indian farmers and exporters of tea, coffee, cashew and fruits and vegetables,” a senior official involved in Indian farm export policy told Reuters on condition of anonymity.
However, according to Ajay Srivastava, founder of the Global Trade Research Initiative, India’s farm exports to the US are not likely to see major gains because they rely mainly on a few high-value spices and niche products.
“The tariff shift would marginally strengthen India’s position in spices and niche horticulture and help revive some lost U.S. demand after the tariff hikes,” he said.
