US Tariff Relief Boosts India's Food Exports: A $1 Billion Opportunity

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The United States has made a significant move to ease inflation by exempting over 250 food products, including coffee, tea, and tropical fruits, from reciprocal tariffs. This development is expected to benefit India, which had seen a decline in exports worth around $1 billion after President Donald Trump imposed 50% tariffs on Indian goods in April. The revised list of exempted goods, announced in an executive order, is set to benefit India's agro-exporters, particularly those in the tea, coffee, and spice sectors. The US tariffs, which had been imposed in August, had a significant impact on Indian exports, with a 12% decline in September compared to the previous year. According to Ajay Sahai, director general of the Federation of Indian Export Organisations, the exemption announcement is expected to benefit at least $2.5 billion of exports. India's spice exports, worth $358 million, and tea and coffee products, valued at over $82 million, are expected to see a significant boost. While Indian exports to the US are concentrated in a handful of high-value spices and niche products, the tariff relief is seen as a positive signal for the Indian agro-exporters. The country's exports of cashews, spices, and tea are also expected to see a resurgence. The US government's move to scrap tariffs on these products comes amid growing pressure to combat rising consumer prices. The exemptions, which account for around $1 billion of India's exports to the US, are set to create new demand in the Indian market, which had seen a lull following the April tariff announcement.