The word ‘tariff’ may have never earned so many headlines across the globe. The threats made by US President Donald Trump would have rattled trade negotiators in every country exporting goods and services to the US. Those who spent years in trade negotiations at the World Trade Organisation (WTO) must be wondering whether the entire global edifice of fair global trade is about to collapse.
If reciprocal tariffs on products imported into the US, from countries with which it has a trade deficit, come into effect on April 1, several export sectors in India will be adversely impacted. Agriculture and allied sectors will be one of them. India’s export of marine products may also face maximum disruption.
Trade disputes with the US are not new
While strategic ties between India and the US continued to strengthen after the civil nuclear agreement was signed in 2005, trade disputes have also continued over the years.
In 2014, the dispute settlement panel of the WTO ruled in favour of the US and found that India’s ban on US poultry meat, eggs and live pigs, on the grounds of avian influenza, was imposed without sufficient scientific evidence.
Imposition of higher tariff by the US on imports from India is also not new. In March 2018, during Trump 1.0, the US imposed additional tariffs of 25% and 10% on steel and aluminium respectively. As a result, India’s steel exports to the US declined by 35% during 2018-19 as compared to 2017-18. In retaliation, India imposed an additional duty of 20% on apples and walnuts and Rs 20 per kg on almonds on imports from the US. Due to this, import of these items from other countries went up.
The additional duties were withdrawn by India in September 2023 after negotiations with the Biden administration.
But the US has challenged Indian support to agriculture in WTO on multiple occasions with regard to rice, wheat, sugarcane and cotton.
In the Trump 2.0 administration, negotiations on tariffs will be more difficult as the President seems to be adamant on imposing reciprocal tariffs.
Tariff differential
It is true that India’s average import tariff on agricultural produce is 37.66% – as per the Most Favoured Nation (MFN) rate which is applicable to all the countries, except those with which India has a bilateral or regional agreement. The tariff charged by the US for import of farm produce is 5.29%. Thus, there is a gap of 32.37% in tariff.
Due to its large population and the need for ensuring food security, India is not a consistent exporter of agricultural produce. From time to time, restrictions of various kinds are imposed on agri-exports so that domestic availability of food items at reasonable prices is ensured. In the last two years, India imposed restrictions on export of rice, wheat, sugar and onion. In years of good monsoon and stable production, agriculture exports from India have been robust. In the last ten years, they have gone up from USD 22.70 billion in 2013-14 to USD 48.15 billion in 2023-24.
Seafood Exports
The US is a major destination of India’s seafood exports, with Indian exports reaching $3.37 billion in 2021-22. It came down in 2023-24 to $2.58 billion. If the US were to impose an additional tariff of 32.4% on seafood imports from India, the exports, especially of shrimp, will be severely impacted.
Rice and buffalo meat export
India is a large exporter of buffalo meat. In 2023-24, the earnings from these exports were $3.74 billion. But the US does not allow import of buffalo meat from India as it does not comply with US health standards, especially the foot and mouth disease-free status. So, this item of export will not be impacted.
Import of rice into the US has been increasing over the years from around 7% of its domestic market in 1993-94 to more than 25% by 2022-23. In 2023-24, Indian export to the US was $304.78 milion of basmati rice and$ 45.1 million of non-basmati rice. Thus, basmati rice in the US will become more expensive for consumers if reciprocal tariffs are imposed.
Another item of interest to Indian farmers is the export of guar gum. In 2023-24, it fetched $106 million. It has helped farmers in Rajasthan and Gujarat to earn higher income in certain years. Miscellaneous food items and processed food may also be adversely impacted. But all this will cause a spike in food inflation in the US.
Export of Processed food and agriculture items to US (2023-24). Source: APEDA
In the last few years, export of fresh fruits from India to the US has also picked up. In 2023-24, it exported fruit worth $13.20 million, out of which the export of mangoes was worth around $10 million.
Export of US agriculture produce to India
The US has been interested in exporting its agricultural produce to India which is seen as a large market.
In a January 2025 paper, the US Department of Agriculture noted that ‘India’s ability to feed its growing population on its own will be challenged by the impact of climate change on its production capabilities. India is already confronting production problems resulting from depleted water reserves, soil degradation, increasingly erratic weather, and labor migrating to urban areas’.
They see the possibility of exporting wheat, cotton, dairy products, ethanol, fresh fruits, processed food, beverages, pulses and tree nuts.
Due to higher-than-normal temperature in north-west India in February 2025, it is feared that wheat production from the current rabi crop may be lower. In this situation, the US would also be looking for export of wheat to India.
Export of fresh fruits and vegetables to US (2023-24). Source: APEDA
India is a major importer of edible oils and pulses. But these items are not imported in large quantities from the US. India imports soybean oil from Argentina, Brazil and Russia as they quote a lower price. Due to restrictions on import of genetically modified food items, India does not import maize from the US.
While the Ministry of Commerce will conduct tough negotiations with the US, it is hoped that the Indian Ministry of Agriculture and Food will not yield ground on public stockholding for food security stocks. Since the officers in ministries have short tenures, institutional memory on trade negotiations is rather limited. Therefore, the ministries will do well to take help of outside expertise in formulating India’s stand in conducting these talks.
In the meantime, India must support its science establishment to breed climate resistant varieties of seeds so that food security is not imperilled.
Siraj Hussain is a former Union agriculture secretary.
