Tipping the scale: How US tariffs could shake up India’s agri exports

Virat Bahri | April 8, 2025

The United States’ decision to impose reciprocal tariffs has injected fresh uncertainty into global trade, impacting multiple sectors—agriculture being one of the most exposed. As one of the top export destinations for food and agri-products, the US market plays a critical role in shaping India’s trade fortunes. In response, several countries are now accelerating efforts to secure bilateral trade agreements with Washington to safeguard their interests.

For Indian exporters, the move signals potential headwinds in the form of higher costs and intensified competition. Yet, within this disruption lies an opportunity—to tap into segments of the US food and beverage market where India’s footprint remains minimal, and to build resilience through strategic diversification.

This article explores the implications of the US reciprocal tariff regime on India’s agri exports, and outlines potential strategies for India to address this challenge.

In a move that could reshape global agri-trade dynamics, the United States has announced a 26% reciprocal tariff on Indian imports—an action with far-reaching consequences for India’s agricultural export sector. This policy, unveiled under former President Donald Trump’s trade framework and recently revived, signals rising protectionist sentiment in the world’s largest economy. According to an analysis by Morgan Stanley, the tariff could shave off 30–60 basis points from India’s FY26 GDP growth forecast of 6.5%, highlighting the broader economic implications.

For India, the stakes are particularly high. The US remains the largest export destination for Indian food and beverage products, including rice, spices, marine items, and processed foods. As India continues its push to expand agricultural exports, the imposition of such tariffs not only threatens its trade surplus in this sector but also calls into question the stability of global trade relationships amid rising geo-economic tensions.

Top exporters of agri products to the US

Exporters	Imported value in 2019	Imported value in 2024	5-year CAGR	Market share
Mexico	30.6	48.4	9.6%	21.8%
Canada	24.3	39.3	10.1%	17.7%
Italy	5.7	9.0	9.8%	4.1%
Brazil	3.7	7.7	15.6%	3.5%
China	5.0	6.9	6.5%	3.1%
Chile	5.5	6.9	4.9%	3.1%
France	6.5	6.9	1.2%	3.1%
India	5.1	5.9	3.0%	2.6%
Australia	3.5	5.5	9.4%	2.5%
Indonesia	4.0	5.4	6.1%	2.4%

Source: ITC Trade Map; Import values in US$ billion

The data in the table above shows that Mexico and Canada clearly dominate F&B exports to the US, accounting for nearly 40% market share. They are followed by Italy at 4.1%, Brazil at 3.5% and China at 3.1%. India is among the key players with a share of 2.6%. However, its 5-year CAGR shows room for improvement.

Now let us do a more granular analysis of India’s F&B exports to the US. For the purpose of our analysis, we take the top products accounting for over 80% of India’s exports in 2024.

India’s F&B exports to the US by chapter

HS Code	Product label	Value in 2019	Value in 2024	5-year CAGR	Market share	Share in India’s exports	Share in US imports
03	Fish and crustaceans…	2,159.7	1,974.7	-1.8%	35.6%	32.2%	9.4%
16	Preparations of meat, fish, crustaceans, molluscs…	361.8	605.5	10.8%	10.9%	81.5%	8.6%
09	Coffee, tea, maté and spices	289.6	441.1	8.8%	8.0%	8.3%	3.8%
13	Lac; gums, resins…	411.6	419.8	0.4%	7.6%	38.5%	23.1%
10	Cereals	210.9	391.7	13.2%	7.1%	3.2%	11.8%
21	Miscellaneous edible preparations	159.9	314.6	14.5%	5.7%	19.0%	2.5%
12	Oil seeds and oleaginous fruits…	205.4	265.9	5.3%	4.8%	12.1%	9.0%
15	Animal, vegetable or microbial fats…	121.0	189.7	9.4%	3.4%	9.5%	1.1%

Source: ITC Trade Map

We see that India is particularly vulnerable in the instance of HS 16, i.e. Preparations of meat, fish crustaceans, as the US accounts for 81.5% of our exports. In order of dependence, this is followed by HS 03 (Fish and crustaceans at 32.2%); HS 13 (Lac, gums, resins at 38.5%); HS 21 (Miscellaneous edible preparations at 19%) and HS 12 (Oil seeds and oleaginous fruits at 12.1%). On the other hand, US has relatively higher dependence on India for HS 13 (Lac, gums resins at 23.1%) followed by HS 10 (Cereals at 11.8%).

Now let us look at India’s key competitors in these categories of strength.

India’s position in US market in sectors of its strength

Exporters	Imported value in 2019	Imported value in 2024	5-year CAGR	Market share
Canada	9.4	14.8	9%	19%
India	4.4	4.7	2%	6%
China	3.3	4.7	7%	6%
Indonesia	3.4	4.7	6%	6%
Brazil	1.9	3.6	13%	5%
Chile	2.7	3.6	6%	5%
Mexico	2.0	3.4	12%	4%
Vietnam	1.9	3.0	9%	4%
Singapore	3.0	2.7	-2%	4%
Italy	1.1	2.6	17%	3%

First of all, it must be noted that US imports in these select HS codes account for US$ 77.8 billion in 2024, which is approximately 34.9% of US F&B imports. This shows that there is still much more in terms of import value that India can explore in the US itself, more specifically 65% of the market. Secondly, the 5-year CAGR of 2% is very low compared to competitors, even as India ranks 2^nd in US imports of these categories. This makes competition intense for India, particularly with China that has a CAGR of 7% and almost neck to neck with India.

Now with the tariff regime in place, India faces a significant challenge in its key export sectors. For instance, in the case of shrimps, India’s reciprocal tariff at 26% makes it less competitive to competitors Ecuador and Argentina, which also have a significant advantage of distance. In the case of rice, India faces a lower reciprocal tariff than its key competitor Thailand, which puts it at an advantage. However, for vegetable saps and extracts, India faces a higher reciprocal tariff than than competitors Mexico, France, and Spain, many of whom benefit from lower duties or FTA-based preferential access.

An ICRIER report titled Trump’s Tariff Gamble: Likely implications for India and how to navigate it examines impact of the tariffs on various sectors including agriculture. India holds a dominant position in several key agricultural exports to the US, such as guar gum derivatives (HSN 130232) and castor oil (HSN 151530), accounting for 65.5% and 96.6% of US imports respectively. However, the proposed 26% reciprocal tariff threatens to erode this advantage by making Indian products less competitive compared to those from countries like Germany, Brazil, and Canada, which face significantly lower or zero tariffs (10–20% or none). A similar trend is seen in natural honey (HSN 040900), where India commands a 23.3% share but contends with stiff competition from Argentina and Brazil—both enjoying just 10% tariff rates. In such price-sensitive segments, even marginal cost increases can drive buyers to alternate sources.

In processed food categories such as bread, pastries, sweet biscuits, and food preparations (HSN 190531, 210690), India’s market share remains modest at 2–2.5% despite rising demand. These products currently face 0–6.4% MFN tariffs, while competitors like Canada, Mexico, and Singapore benefit from 0–10% duties under FTAs and trade partnerships. A 26% tariff on Indian exports would further erode competitiveness and limit growth prospects in these segments.

India’s expanding exports of niche products like capsicum (HSN 090422), prepared fish (HSN 160420), cucumbers and gherkins (HSN 200110), and sesame seeds (HSN 120740) are also at risk. Preferential access enjoyed by competitors from Mexico, Peru, and Guatemala would allow them to undercut Indian prices if additional tariffs are levied.

Overall, the implications of the US reciprocal tariff are likely to be a mixed bag for Indian agriculture. While certain commodities may withstand the pressure or even gain ground, others are vulnerable to losing market share to more favorably placed competitors. To mitigate this risk and sustain export momentum, it is imperative for India to actively pursue a bilateral trade agreement with the United States. Such an agreement could secure preferential or zero-tariff access, ensuring Indian agri-exports remain competitive against Latin American and other global exporters benefitting from existing trade arrangements.

However, this challenge also presents a strategic opportunity. Nearly 65% of the US food and beverage import market still remains untapped by Indian exporters. While traditional strengths may be under pressure, the current crisis could serve as a catalyst for Indian companies to diversify their offerings, upgrade quality and packaging, and aggressively enter new categories where India’s presence is relatively insignificant. There is significant potential to capture market share in high-demand, value-added F&B segments by aligning with US consumer preferences, dietary trends, and compliance standards.

Tipping the scale: How US tariffs could shake up India’s agri exports

Leave a comment

Cancel reply

Tipping the scale: How US tariffs could shake up India’s agri exports

Leave a comment

Cancel reply

Subscribe To Newsletter