Indian spice, tea exporters benefit as US lifts key tariffs
What's the story
Indian spice traders and tea growers are set to benefit from a major tariff reduction announced by US President Donald Trump. The move comes as part of an effort to ease import duties on nearly 200 food, farm, and agricultural goods. The decision comes amid rising domestic concerns in the US over soaring prices due to Washington's trade barriers.
Tariff details
Indian exports included in revised tariff list
The revised tariff list includes a range of Indian exports such as black pepper, cloves, cumin, cardamom, turmeric, ginger, specialty teas, mango-based products and certain nuts like cashew. In 2024 alone, India exported spices worth over $500 million to the US. Tea and coffee exports were also worth nearly $83 million during the same period.
Unaffected exports
Exclusions from the tariff reduction
However, it's worth noting that high-value shipments of shrimp, other seafood varieties, and basmati rice have been excluded from the relief. Indian gems, jewelry, and apparel also continue to face steep 50% US tariff barriers. These are pending a broader trade agreement linked to New Delhi curbing imports of Russian oil and increasing purchases of American energy.
Market impact
Processed food categories to benefit the most
According to Indian officials, nearly 50 processed food categories with an export value of $491 million last year are likely to benefit the most from this tariff reduction. This includes coffee and tea extracts, cocoa preparations, juices, fruit pulps, mango derivatives and vegetable waxes. Spices worth $359 million are expected to be the next major beneficiary of these changes in US import duties.
Additional beneficiaries
Fruits and nuts also included in tariff reduction
The tariff reduction also includes 48 types of fruits and nuts such as coconuts, guavas, mangoes, cashew nuts, bananas, areca nuts and pineapples. However, these only accounted for about $55 million in exports. Together with the revised list of products under the new US import duties regime on agricultural goods from India, nearly one-fifth of India's $5.7 billion agricultural shipments will be impacted.
Competitive advantage
Tariff reduction to provide level-playing field
An Indian government official said, "These reductions will provide a level-playing field for these agri exports which were disadvantaged due to higher tariffs on India's exports vis-a-vis its competitors." The official added that Indian products are well-placed to gain due to existing supplier credibility, established distribution networks, and strong diaspora-driven demand. These factors give a competitive edge in the US market.