Will the India-US Trade Deal Impact J&K's Walnut Industry?

Srinagar: The India-US trade agreement is likely to inflict another blow on the walnut industry in Jammu and Kashmir which has already been hit hard by falling production and stagnant prices due to imports from other countries.

A statement by the Press Information Bureau on Monday (February 9) suggested that the tariff on walnut imports was likely to be reduced under the trade agreement whose terms have not been spelled out yet.

It said: “Certain highly sensitive items have been liberalised under Tariff Rate Quotas where limited quantities are allowed at reduced duties. Products under this category include in-shell almonds, walnuts, pistachios, lentils etc.”

The two countries also announced on Saturday that New Delhi was going to eliminate or reduce tariffs on a wide range of agricultural products in March when the final agreement is expected to be rolled out.

Criticising the Union government, J&K chief minister Omar Abdullah said that the agreement was going to harm the farmers of Jammu and Kashmir.

“We are discussing measures to promote the rural economy (in J&K) and they (the Union government) have allowed American imports with zero duty. Where has your sympathy for Jammu and Kashmir vanished?” he said in the assembly on Tuesday.

As the BJP legislators in the House sought to object, Abdullah added, “It’s a sellout. Who has benefitted from this deal in J&K? Maybe you (BJP) have but it hasn’t helped our walnut and almond growers”.

Noor-ud-Din Azad, a walnut exporter based in Srinagar, said that the traders and consumers in India prefer Chilean and other variants of walnuts over those from J&K which produces more than 90% of all walnuts grown in the country.

“The kernels of imported varieties have a whiter appearance which makes them attractive for customers.” Azad said.

Deepankar Sen Gupta, an economics professor at the University of Jammu, said that the walnut sector in India was a “high value low volume business” and foreign imports have done little to affect the “premium” value of Kashmiri walnuts.

Gupta said that it was difficult to assess the impact of new tariffs on Kashmiri walnuts as the final rate hasn’t been announced yet, “American walnuts won’t stand in competition with the Kashmiri walnuts whose prices are generally high and the premium Kashmiri variants sell at even higher rates”.

Three walnut varieties are grown in Kashmir - the hardest to crack Wounth which is also the cheapest followed by Burzael and then Kagazi which cracks open with bare hands and is also the priciest.

A 2017 study by the Sher-e-Kashmir University of Science and Technology (Kashmir) found high concentration of good fatty acids in the largely organic Kashmiri walnuts as compared with foreign varieties, while recommending their introduction in daily diet to reduce the risk of coronary artery diseases.

India produced 307 metric tonnes of walnuts, much of it from more than 86,000 hectares of land in Jammu and Kashmir under walnut cultivation while more than 2134 metric tonnes were exported from India to other countries, according to the Union commerce ministry.

On the other hand, India imported more than 3785 metric tonnes of walnuts in 2024 mainly from Afghanistan followed by Chile and Australia, according to the World Bank. The United States contributed merely 25,402 kg to India’s imports.

Over the years, consumption of walnuts has steadily risen in India while the local production remains limited.

Azad said that around 2000-3000 containers of walnuts, each containing 10 tonnes, land in India every year. “In Kashmir we only produce around 700 truckloads which will be consumed in the market within 15 days due to rising demand,” he said.

Minister Goyal asserted that the tariff reduction was unlikely to affect local farmers, “Some items like walnuts (and) almonds …. have been exported (by India) for years. We have granted phased eliminations on some of these items, and we’ve granted exemptions from the very beginning for certain items we need”.

However, fears are rife that the walnuts growers and small-time traders in Kashmir could become vulnerable to the market squeeze as the availability of cheaper American walnuts may lower the prices of other variants.

Haji Bahadur Khan, president of Kashmir Dry Fruit Association said that the prices of Kashmiri walnuts which sell from Rs 300 per kilo to Rs 1400 per kilo have fallen by Rs 100 to 150 per kilo after the US-India trade deal was announced.

“Our farmers and traders are already struggling due to stagnant prices. The reduction of tariffs will worsen their situation. Some small-time traders who had made bulk purchases from farmers in autumn are staring at huge losses,” he said.

Arun Kumar Gupta, president of Jammu Chamber of Commerce and Industry, appreciated the recent announcement by the Union government in the budget for the promotion of high-value nut outcrops like walnuts in J&K and elsewhere which he said will discourage imports.

However, he said that the Indo-US deal will have an adverse impact on J&K’s farmers. “There is no doubt that we will have to bear the brunt of the tariff waiver. But if our production increases, it will stabilise the market forces,” he said.

Khan, the trade leader, said that 80% of Kashmiri walnuts were exported to western countries some years ago when walnut imports attracted high tariffs in India.
“Now a negligible percentage makes it to the better markets in the west because of the influx of imported walnuts which have ruined the market for Kashmiri walnuts”.
Khan alleged that the successive governments have neglected the walnut sector and the lack of interventions such as awareness campaigns about Kashmiri walnut’s premium value and technical assistance in harvest and post-harvest processes has pushed the farmers to the brink.

Gupta, the economist, said that the influx of imported variants of saffron, the world’s priciest spice from Iran and Spain initially spoiled the market for Kashmiri saffron by lowering the prices.

“That damage has now been reversed because once the people realised what the real stuff was, they changed their buying habits. The walnuts grown even in Bhaderwah and Poonch district [of J&K] have not been able to make any mark. It is the Kashmiri walnut which holds the sway”.

Application submitted to the GI registry. Photo: The Wire.

This change happened after Kashmiri saffron got a Geographical Indication (GI) tag in 2020 which turned into a game changer for the farmers. In 2023, the J&K government had set a proposal rolling for obtaining a GI tag for Kashmiri walnuts.

The country’s GI registry is managed by the controller general of patents, designs and trade marks which operates under the ministry of commerce and industry.

Additional chief secretary of J&K (agriculture production department) Shailendra Kumar told The Wire that the proposal has been finalised, “It is with the central agency for issuance,” he said.

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