Donald Trump and PM Modi.
US President Donald Trump has given big relief to India. It is reported that America has decided to reduce the tariff on Indian spices and tea. Due to which Indian spice traders and tea producers are expected to benefit. Trump has decided to relax import duty on about 200 food, agri and agri products. Due to the imposition of tariffs, there was a significant increase in inflation and trend tension in America. Due to which a lot of pressure was being seen on the government. Keeping all this in view, this decision has been taken by America.
The products on which the tariff has been reduced include many products, which include black pepper, clove, cumin, cardamom, turmeric, ginger, many varieties of tea, mango products and dry fruits like cashew. India sent spices worth more than $500 million to America in 2024, while exports of tea and coffee were worth about $83 million. America also imported cashews worth 843 million globally, of which about one-fifth was from India.
No discount on these products
However, this relief is limited to India’s largest agriculture-related revenue generating products. High value shipments of shrimp, other seafood varieties and Basmati rice have been excluded. Additionally, Indian gems, jewelery and apparel face huge US tariff barriers of 50 per cent unless a comprehensive trade agreement is reached. Trump has linked this agreement to New Delhi’s curbing of Russian oil imports and increasing purchases of American energy. Overall, these exemptions will apply to India’s eligible agricultural exports worth approximately $1 billion.
Which categories will benefit?
According to New Delhi-based officials, around 50 processed food categories will benefit the most, whose export value was estimated at $491 million last year. These include coffee and tea extracts, cocoa-based product products, fruit juices, pulp products, mango preparations and vegetable waxes. Spices worth $359 million are expected to get the next big profit. Another 48 types of fruits and nuts, including coconuts, guavas, mangoes, cashews, bananas, betel nuts and pineapples, will also benefit, although their exports were only worth about $55 million.
Overall, the revised list accounts for about one-fifth of India’s agricultural exports worth $5.7 billion and about 40 per cent of India’s total merchandise exports worth $86 billion last year. An Indian government official said in a media report that these cuts would provide a level playing field for these agricultural exports, which were at a disadvantage due to high tariffs on India’s exports compared to its competitors.
Why did the decision have to be taken
This decision of Trump has come at a time when there has been a lot of concern about inflation in America. Trump is facing the resentment of American voters. Due to which the Republican Party had to face a crushing defeat in the recently held by-elections. The US President has proposed using tariff revenue to issue $2,000 checks and launch an investigation into the meat packing sector in response to public anger over rising prices. Although Trump says his tariff regime has not increased domestic spending, US industry groups and policy critics have welcomed the reversal.