NEW DELHI —The word “tariff” may have never earned so many headlines across the globe. The threats made by U.S. President Donald Trump would have rattled trade negotiators in every country exporting goods and services to the U.S. 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.
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If reciprocal tariffs on products imported into the U.S., 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 U.S. 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 favor of the U.S. and found that India’s ban on U.S. poultry meat, eggs and live pigs, on the grounds of avian influenza, was imposed without sufficient scientific evidence.
Imposition of higher tariff by the U.S. on imports from India is also not new. In March 2018, during Trump 1.0, the U.S. imposed additional tariffs of 25% and 10% on steel and aluminium respectively. As a result, India’s steel exports to the U.S. 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 U.S. 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The additional duties were withdrawn by India in September 2023 after negotiations with the Biden administration.But the U.S. has challenged Indian support to agriculture in WTO on multiple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 Favored 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 U.S. 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 .70 billion in 2013-14 to .15 billion in 2023-24.
Seafood exports
The U.S. is a major destination of India’s seafood exports, with Indian exports reaching .37 billion in 2021-22. It came down in 2023-24 to .58 billion. If the U.S. 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 .74 billion. But the U.S. does not allow import of buffalo meat from India as it does not comply with U.S. health standards, especially the foot and mouth disease-free status. So, this item of export will not be impacted.
Import of rice into the U.S. 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 U.S. was 4.78 million 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 6 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 U.S.
In the last few years, export of fresh fruits from India to the U.S. has also picked up. In 2023-24, it exported fruit worth .20 million, out of which the export of mangoes was worth around million.
Export of U.S. agriculture produce to India
The U.S. has been interested in exporting its agricultural produce to India which is seen as a large market. In a January 2025 paper, the U.S. 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 (beans) 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 U.S. would also be looking for export of wheat to India.
India is a major importer of edible oils and beans. But these items are not imported in large quantities from the U.S. 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 U.S.
