President Donald Trump has just moved to ease rising consumer prices in the US by slashing import duties on more than 250 food items, out of which 226 were agricultural products.
The surprise move brought much-needed relief for American shoppers and, at the same time, a huge victory for Indian farmers and exporters.
According to experts, this tariff reduction could lead to an increase in India’s agricultural exports to the US by an estimated $2.5 to $3 billion (around Rs 22,000–26,000 crore).
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Trump April Tariffs Shock Indian Exporters
The Trump administration had earlier, in April, slapped sweeping retaliatory tariffs on various countries’ imports, including India’s. In the case of Indian goods, these tariffs were as high as 50% on certain categories.
The duties were imposed to remove the inequalities in trade and, in the case of India, were attached to its ongoing trade disputes with the US.
These high duties immediately hurt key Indian exports like spices, tea, coffee, and cashews, and there was a sharp fall in their market share in the US, which had been a key buyer.
How the Tariff Cut Will Change the Indian Economy
Scrapping these tariffs, especially on 229 agricultural products, will go a long way in influencing the Indian economy in aspects touching on farming and export:
The cuts in tariff immediately make Indian spices, such as pepper, cardamom, turmeric, and ginger; tea; coffee; and high-value fruits more competitive in the American market.
When tariffs were high, Indian products became expensive compared with those of competitors; now, their prices will fall to become more attractive for US buyers. This would help reverse the decline in exports seen over the last few months.
Income for Farmers: The increased demand arising from the US will translate into more orders and better prices for Indian farmers of these cash crops. This provides a big boost to the labor-intensive agriculture sector in India.
Level Playing Field: The removal of the high duties has created a level playing field for Indian exporters, who otherwise were at a disadvantage.
Already renowned for their quality and established supply chains, India can now exploit these strengths to the full measure, not least among the large Indian-American diaspora, who have an especially strong preference for food products from their home country.
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