US Grants Tariff Relief for Indian Farm Products
In a significant move for bilateral trade, the United States has exempted a select group of agricultural and food products from the steep reciprocal tariffs it imposed earlier this year. This decision, announced on November 14, 2025, and effective from November 13, removes higher duties on commodities where India has established export strengths.
The exemptions apply to coffee, tea, tropical fruits, spices, cocoa, bananas, tomatoes, beef, and certain fertilizers. These items will now face only standard Most-Favoured-Nation duties instead of the punitive reciprocal tariffs that could reach up to 50%. This creates a crucial level playing field for Indian exporters in categories where they already have a global footprint.
Why the US Made These Exemptions
The decision stems from a blend of economic needs and strategic political calculation. Many of the exempted products, such as coffee and spices, are essential for US supply chains, which rely heavily on imports. The US either does not produce these items at a large scale or cannot cultivate them due to its climate.
This step also helps Washington manage domestic food inflation and diversify its import sources, reducing reliance on potentially adversarial supply chains. Unlike tariffs on industrial goods like steel or electric vehicles, these agricultural exemptions do not provoke opposition from powerful US domestic farm lobbies, making them politically easier to implement.
Furthermore, the move is seen as a way for the US to soften the edges of its broader tariff strategy. By relaxing duties on climate-dependent goods, the administration can maintain strategic pressure in other sectors while avoiding shortages in categories where domestic production is limited.
India's Current Position in the Exempted Categories
While the opportunity is meaningful, India's current share of the US market in these exempted lines is modest. In 2024, the US imported a massive $50.6 billion worth of these goods globally, but India accounted for only $548 million, or roughly 1% of this basket.
India's exports are concentrated in specific high-value niches that leverage its unique agro-climatic conditions. Key export items to the US include:
- Pepper and capsicum preparations ($181 million)
- Spice mixes, including turmeric, ginger, and curry blends ($83.7 million)
- Anise and cumin seeds ($85 million)
- Cardamom and nutmegs ($14.6 million)
- Tea ($68.5 million)
However, India has virtually no presence in larger US import categories like fresh tomatoes, citrus fruits, melons, and bananas, where Latin American exporters dominate. Similarly, in sectors like coffee and cocoa beans, Africa and South America lead global supply.
Impact and Opportunities for Indian Exporters
The immediate gains for India will be strategic rather than transformational. The tariff exemption prevents a potential erosion of competitiveness for Indian spices, tea, and niche horticulture products, ensuring they remain viable in the US market.
According to Ekram Husain, CEO of Essar Exports, the duty reduction to nil will boost exports of mangoes and pomegranates. This is particularly important as India's overall mango exports fell 6.3% in FY25 to $56.34 million.
In the spices sector, major brands like Everest, MDH, Aachi, Ramdev, ITC, and Badshah Masala are poised to benefit. India shipped over $500 million worth of spices to the US in 2024, with tea and coffee exports valued at nearly $83 million.
It is crucial to note that some of India's largest agricultural exports to the US, such as basmati rice and shrimp, remain outside this exemption list and continue to face higher tariffs.
Experts warn that without swift action, the primary beneficiaries of these exemptions will be competitors from Latin America, Africa, and ASEAN. For India to capitalize on this window, it must scale up production, invest in post-harvest infrastructure like cold chains, build residue-free supply chains, and diversify into climate-compatible fresh fruit categories.
Ajay Srivastava of the Global Trade Research Initiative emphasizes that India needs decisive policy support to ensure high-quality, consistent supply and minimize post-harvest losses. Otherwise, the tariff relaxation will provide a greater advantage to other global suppliers.
In conclusion, the US tariff exemptions provide Indian exporters with a small but important opening. The broader benefit, however, will only materialize if India moves quickly to implement structural improvements in its agricultural export ecosystem, enhancing competitiveness for the long term.
