India’s shrimp, basmati rice, and buffalo meat exports to the US—a trade worth billions—face fresh uncertainty as Donald Trump slaps a 26% “reciprocal tariff” on Indian imports. The move could erode India’s price advantage, disrupt supply chains, and open the door for rival exporters from Vietnam, Thailand, and South America.
The US is India’s top market for agricultural goods, with bilateral farm trade totalling $6.6 billion in 2024. India exported $5 billion worth of agricultural products, while imports stood at $1.5 billion. Now, with tariffs coming into force starting April 9, exporters are bracing for a potential drop in shipments and market share losses.
Exporters warn that the tariffs could hit key agricultural exports, particularly basmati and non-basmati rice, shrimp, wheat, and buffalo meat, which together account for 46% of India’s farm trade with the US.
The White House fact sheet outlines that in addition to the 26% tariff on Indian imports, a 10% tariff on all imports will take effect on April 5. By April 9, countries with the largest trade deficits with the US will face even steeper “reciprocal tariffs.”
Trump’s order states that these tariffs will remain in effect until the US trade deficit and underlying “non-reciprocal” policies are addressed, but he has left room for modifications—allowing tariffs to rise in response to retaliation or fall if a trading partner aligns with the US’ economic and security interests.
India’s weighted average tariff has already declined from 17% in 2023 to 10.66% following duty cuts in the Union Budget for 2025-26, a move that could affect how the US frames its tariff arguments.
According to a February report by the Global Trade Research Initiative (GTRI), the hardest-hit segment will be fish, meat, and processed seafood, worth $2.58 billion, facing a 27.83% tariff differential.
Shrimp—India’s largest seafood export to the US—will struggle to remain competitive, potentially ceding market share to rival suppliers from Ecuador.
Processed foods, sugar, and cocoa exports, valued at $1.03 billion, will also face a 24.99% tariff hike, making Indian snacks and confectionery less attractive to US buyers.
Cereals, vegetables, fruits, and spices, worth $1.91 billion, will see a 5.72% tariff differential, directly affecting shipments of rice and spices. Dairy products, a smaller but significant segment at $181.49 million, will be hit with a 38.23% tariff hike, making ghee, butter, and milk powder more expensive and potentially reducing their market share.
Edible oils, including coconut and mustard oil, will face a 10.67% tariff increase, raising costs for US importers. Alcohol, wines, and spirits will see the steepest tariff increase—122.10%—though total exports in this category are limited to $19.2 million.
Live animals and animal products, worth $10.31 million, will be subjected to a 27.75% tariff differential, further squeezing Indian exporters. However, tobacco and cigarettes, valued at $94.62 million, will remain unaffected, as the US already imposes tariffs of 201.15%, creating a negative tariff differential (-168.15%).
Higher tariffs on Indian agricultural exports could push US importers toward alternative suppliers, further squeezing India’s market share, trade experts warn.
To soften the impact, the GTRI suggests that India propose a 'zero-for-zero' tariff strategy' to the US, under which both countries would mutually eliminate tariffs on select goods rather than negotiating a full bilateral trade agreement. India would need to identify product categories where it can remove import duties on American goods without harming domestic industries, in exchange for similar tariff cuts from the US.
The US Trade Representative’s (USTR) annual report, released on March 31, flagged India’s high tariffs across multiple sectors as a key trade barrier.
The report pointed out that India imposes tariffs of up to 150% on alcoholic beverages, while other items such as vegetable oils (45%), apples, corn, and motorcycles (50%), automobiles and flowers (60%), and natural rubber (70%) also face steep duties. Certain agricultural goods—including coffee, raisins, walnuts (100%)—are among the most heavily taxed.
"High tariff rates present a significant barrier to US agricultural exports, particularly in processed foods, poultry, potatoes, citrus, almonds, and fast-food ingredients," the report noted.
The USTR highlighted that India’s WTO-bound tariff rates on agricultural products average 113.1% and can go as high as 300%, giving India considerable flexibility to adjust tariffs at any time. This, the report said, creates uncertainty for US exporters, farmers, and ranchers.
Tensions over tariffs are not new. In June 2019, after the US revoked India’s preferential tariff benefits under the Generalised System of Preferences (GSP) programme, India imposed retaliatory tariffs ranging from 1.7% to 20% on 28 US products, including almonds, apples, walnuts, chickpeas, and lentils.
(By arrangement with livemint.com)
