Trump tariff rollback offers Indian farm exporters limited relief

Indian agricultural exporters are set to gain from US President Donald Trump’s decision to roll back tariffs on dozens of food products, a move analysts say could help recover demand lost after earlier duty increases.

Trump on Friday removed tariffs on more than 200 food items, including beef, amid concerns over rising grocery prices in the U.S.

Indian exporters of tea, coffee, spices and cashew nuts were hit harder than EU and Vietnamese suppliers over recent months, as duties on certain Indian goods were doubled to as high as 50 per cent. This included a punitive 25 per cent levy applied from the end of August on India’s purchases of Russian oil.

Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO), said between $2.5 billion and $3 billion of exports will benefit from the exemptions.

Positive signal for trade talks

“This order opens space for premium, speciality and value-added products,” he said. “Exporters who shift towards higher-value segments will be better protected from price pressures and can tap rising consumer demand.”

Officials involved in trade and agricultural export policy said the tariff rollback also sends a positive signal for ongoing U.S.–India trade discussions and may ease pressure created by this year’s duty increases.

Exports of Indian goods to the US fell nearly 12 per cent year on year in September to $5.43 billion after tariffs were raised. Farm exports, estimated at $5.7 billion of India’s $87 billion in shipments to the U.S. in 2024, were among those affected.

“The move benefits Indian farmers and exporters of tea, coffee, cashew and fruits and vegetables,” a senior official involved in farm export policy said on condition of anonymity.

Ajay Srivastava, founder of the Global Trade Research Initiative, said India’s farm exports to the U.S. — centred on high-value spices and niche horticulture — may see limited gains due to India’s weak presence in key exempt categories such as tomatoes, citrus fruits, melons, bananas and fruit juices.

“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,” Srivastava said.

He added that Latin American, African and ASEAN suppliers are likely to gain more and noted it remains unclear whether Indian goods will be exempt from the 25 per cent reciprocal tariff or the full 50 per cent.

Exporters said other factors could still compress gains, including high freight costs, competition from Vietnam and Indonesia and stricter US quality requirements.

“Tariff relief is important, but market recovery also depends on logistics and our ability to match prices,” one exporter said.

(With inputs from Reuters)