The announcement of ‘Reciprocal Tariffs’ declared by US President Donald Trump has caused a stir in countries around the world. India, which has a significant trading relationship with the US, is intensively analyzing the possible effects of these tariffs. Experts believe that these tariffs may have the most impact on Indian agricultural products, including alcohol, meat, sugar and other products.
Will Trump be able to plant tariff crop?
In fact, the US is now trying to enter India’s agricultural sector. The most challenging issue in trade talks between India and America was about the entry of American agriculture and dairy products in the Indian market. Agricultural products have more than 10% share in the US total exports. At present, India exports agricultural products worth about Rs 43,000 crore to the US every year, while the US sells agricultural products worth only Rs 13,760 crore to India.
The US gives huge subsidy to farmers for its agricultural products, as it is a major source of income there. At the same time, agriculture in India is a source of livelihood of about 70 crore people. If India reduces import duty (tariff), American cheap agricultural products can create their hold in the Indian market, which can cause huge loss to local farmers. To avoid this situation, India has said to find a balanced solution.
How much is agricultural trade between the two countries?
The two countries have a trade of more than Rs 17 lakh crore every year, in which India’s exports are more than Rs 9 lakh crore. The US imposes an average of 2.2% tariff on Indian exports, while India imposes an average of 12% tariffs on US products. Due to this imbalance, America is incurring a loss of more than Rs 4 lakh crore in trade with India, which remains the main issue of this dialogue.
Possible impact of American tariff
These tariffs imposed by the US aims to balance the competition of imported products in the US market. However, this policy can prove challenging for Indian exporters, especially in areas where America is a major market.
These things from alcohol, meat, sugar will affect these things
- Liquor : Indian liquor, especially whiskey, is in good demand in America. The price of these products may increase due to high tariffs, which can reduce their competitiveness.
- Meat: Indian meat products, especially goats and sheep meat, are exported to the US. Increasing tariffs can have negative effects on the demand for these products.
- Sugar: America is an important market for Indian Chinese exporters. High import duty may affect sugar exports.
- Seafood: Indian seafoods, such as shrimp and fish, are popular in the American market. Increasing tariffs can reduce their demand.
- Agricultural products : Other agricultural products, such as spices, tea, and coffee, may also be affected due to tariffs.