The U.S. has rolled back tariffs on over 200 food products, benefiting Indian exporters of spices, processed foods, teas, and niche horticulture items. Products such as black pepper, turmeric, mango-based goods, and cashews are expected to gain. While key items like shrimp and basmati rice remain excluded, lower duties are expected to revive demand and improve price competitiveness.
However, gains may be limited by high freight costs, tighter U.S. quality norms, and strong competition from Latin American, African, and ASEAN suppliers. The move also eases tensions in U.S.–India trade relations and supports progress toward a bilateral trade agreement expected by end-November, involving reciprocal tariff adjustments.
Indian agricultural exporters stand to benefit from U.S. President Donald Trump’s recent decision to exempt a large numbers of food items from his reciprocal tariff regime—a move analysts say could help revive demand that has weakened over the past year.
On Friday, 14 November, President Trump rolled back tariffs he had previously imposed on more than 200 food products, including beef, following mounting consumer concern about rising grocery prices in the United States. The rollback comes amid rising political pressure over surging grocery prices in the U.S., which contributed to recent Republican by-election losses. In response, President Trump issued an executive order lifting tariffs on several essential food imports.
Spices, processed foods and niche produce among the key gainers
The updated duty list covers several products where India enjoys a strong export foothold — including black pepper, cloves, cumin, cardamom, turmeric, ginger, speciality teas, mango-based items, and select nuts such as cashew.
Indian officials stated that processed foods, valued at about US$ 491 million last year, stand to gain the most. This segment covers coffee and tea extracts, cocoa preparations, juices, fruit pulps, mango-based products, and vegetable waxes. Spices, which recorded US$ 359 million in exports, are expected to be the next key beneficiaries.
The revised list also includes 48 fruits and nuts — such as coconuts, guavas, mangoes, cashews, bananas, areca nuts, and pineapples — though their total export value remains relatively modest at roughly US$ 55 million.
However, some of India’s major agri-related exports to the U.S. — including seafood such as shrimp and basmati rice — are still excluded from the exemption list. High duties on Indian jewellery, apparel, and gems also remain in place until both countries resolve wider trade disputes. According to media reports, Washington is still pressing New Delhi to curb purchases of Russian oil and increase imports of U.S. energy.
Modest gains expected amid intense competition and structural constraints
Indian exporters had been hit particularly hard compared with their EU and Vietnamese counterparts, who faced duties of 15–20%. For India, tariffs were doubled to as high as 50% on several goods. The impact was compounded by a punitive 25% levy imposed from late August on India’s imports of Russian oil, which affected broader trade flows. As a result, India’s exports to the U.S. dropped nearly 12% year-on-year in September to US$ 5.4 billion.
Industry sources estimate that the tariff exemptions could benefit around US$ 2.5–3 billion of India’s exports. They say the move opens the door for more premium, specialty and value-added agricultural products. Exporters targeting higher-value segments will be more resilient to price fluctuations and better equipped to tap growing consumer demand.
Indian farm exports—estimated at US$ 5.7 billion out of the country’s US$ 87 billion in exports to the U.S. in 2024—were among the most affected. Notably, India had shipped over US$500 million in spices and nearly US$ 90 million in tea to the U.S. in 2024. The tariff reduction is expected to boost their price competitiveness and ease market entry, both of which had been constrained under the earlier duty structure. Cashew exporters stand to gain as well. The U.S. imported US$ 843 million worth of cashews globally, with India supplying about 20% of that volume.
However, analysts warned that the upside may be limited. India maintains strong capabilities only in a small band of high-value spices and niche horticulture products, but lacks competitiveness in major exempt categories like tomatoes, citrus fruits, bananas, melons, and fruit juices. Consequently, the tariff change is expected to provide only a modest boost to India’s position in these specialised segments. They also pointed out that suppliers from Latin America, Africa, and ASEAN nations are poised to gain far more from the U.S. decision.
Indian exporters remain cautious, citing elevated freight costs, intensified competition from Vietnam and Indonesia, and increasingly stringent U.S. quality norms. As one exporter observed, tariff relief is welcome, but real market recovery will hinge on logistics and pricing competitiveness.
Bilateral trade agreement likely by end-November
Meanwhile, the United States and India are close to finalising a bilateral trade agreement that is expected to be announced by the end of November. As per media reports, the breakthrough follows Washington’s decision to withdraw penalty tariffs, a move made possible after U.S. officials acknowledged that the issue of India’s Russian oil imports has been effectively resolved. President Donald Trump has publicly indicated that both sides are nearing a deal that would strengthen economic and security cooperation, increase U.S. energy exports to India, and encourage greater Indian investment in key American sectors.
Negotiators have held a series of high-level meetings to address trade frictions that escalated after the U.S. imposed 50% tariffs on selected Indian goods—half of which, according to the report, were linked to India’s purchases of Russian oil. With India’s imports of Russian crude already declining in October and expected to fall further from November, officials say the justification for these penalty duties has diminished, clearing the way for their withdrawal.
A major component of the agreement involves reciprocal tariff commitments. Two tariff bands are currently under discussion: 12–15% or 15–19%.
India’s key concessions include permitting duty-free or reduced-duty imports of U.S. soyabean, corn, and select dairy products. Imported U.S. corn is expected to be used largely for ethanol production. India has also agreed to purchase non-GM soyabean directly from U.S. industry, although Washington is not seeking large volumes given strong Chinese demand.
On dairy, traditionally one of the most contentious areas, India has allowed limited access under strict safeguards but will continue to block imports of liquid milk. Overall, officials believe the agreement represents a balanced compromise, setting the stage for smoother bilateral trade and broader strategic cooperation.
Conclusion
The tariff rollback offers Indian agricultural exporters welcome relief and restores competitiveness in key U.S.-bound products. While gains may be modest due to structural constraints and global competition, the move strengthens momentum in ongoing bilateral trade negotiations. With both sides nearing a broader agreement, the developments mark a significant step toward stabilising trade ties and expanding long-term economic cooperation between India and the United States.
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FAQs
1. Which Indian agricultural products will benefit most from the U.S. tariff rollback?
Key gainers include spices (pepper, turmeric, cumin, cardamom), processed foods, specialty teas, mango-based items, ginger, and cashews. These categories already have a strong Indian export presence and will gain improved price competitiveness in the U.S. market.
2. How much could India gain from the tariff exemptions?
Industry estimates suggest that the rollback could benefit US$2.5–3 billion worth of Indian exports, particularly premium, value-added, and niche agricultural products.
3. Why is the impact expected to be limited for some Indian exporters?
India lacks competitiveness in several exempted categories like citrus fruits, bananas, tomatoes, melons, and fruit juices. Additionally, exporters face challenges such as high freight costs, stricter U.S. quality norms, and strong competition from Latin America, Africa, and ASEAN.
4. Are major Indian agri-exports like shrimp and basmati rice included in the exemptions?
No. Shrimp, basmati rice, and several high-value categories remain excluded. High duties on Indian gems, jewellery, and apparel also continue, pending resolution of broader trade disputes.
5. How does the tariff rollback influence U.S.–India trade negotiations?
The move is viewed as a positive signal, helping ease tensions caused by earlier tariff hikes. It has paved the way for a bilateral trade agreement expected by end-November, focusing on reciprocal tariff commitments and limited Indian concessions on U.S. soyabean, corn, and dairy products.
