Farm exporters scramble for new markets as US levies high duties on Indian goods
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Farm exporters scramble for new markets as US levies high duties on Indian goods
US president Donald Trump announced a 25% tariff on Indian goods starting 1 August, citing New Delhi’s high trade barriers. The US duty on select Indian exports has particularly hit sectors such as shrimp, basmati rice, fresh fruits, vegetables and frozen foods. Industry players view it as a short-term setback, but many believe the disruption may ultimately open doors to new markets and realign global trade flows. Some exporters say their US buyers have already started deferring purchases after the latest tariff announcement by Trump. The increase in tariff from the existing 10% to 25% with effect from 1 August comes in addition to the countervailing duty at 5.77% and anti-dumping duties, to which seafood exported from India is subjected in the US. The blow is even harsher for seafood exporters, now facing a cumulative tariff burden of 35%, including countervail and anti.-dumping costs of up to 35%. India exported marine products worth over $6 billion in FY25, with frozen shrimp accounting for a major share.
While industry players view it as a short-term setback, many believe the disruption may ultimately open doors to new markets and realign global trade flows.
“India exports around 2-2.5 lakh tonnes of basmati rice annually to the US. The steep hike in tariffs has come as a surprise to the exporters,” said Satish Goel, president, All India Rice Exporters’ Association.
Goel added that exporters like him have raised the issue with the ministry of commerce and industry and are exploring alternative destinations, even as buyers in the US hit a pause.
“In the meantime, the basmati exporters are scouting new markets such as Indonesia, where the exposure of non-basmati rice is more,” he added,
US president Donald Trump announced a 25% tariff on Indian goods starting 1 August, citing New Delhi’s high trade barriers, and an additional “penalty” for the country’s continued purchases of oil and weapons from Russia. The US duty on select Indian exports has particularly hit sectors such as shrimp, basmati rice, fresh fruits, vegetables and frozen foods.
Meanwhile, some exporters say their US buyers have already started deferring purchases after the latest tariff announcement by Trump.
“The US-based importers told us to stop any fresh packaging and shipments other than which is already in transit,” said a basmati rice exporter from Haryana, who spoke under the condition of anonymity.
“They have informed us that they wish to assess the situation first before receiving any fresh consignment,” the person added.
Meanwhile, the blow is even harsher for seafood exporters, now facing a cumulative tariff burden of 35%, including countervailing and anti-dumping duties.
This puts Indian exporters at a disadvantage compared to rivals like Ecuador, which faces only 19% duties.
To be sure, shrimp remains one of India’s top seafood exports, with the US being the largest market.
In FY25, India exported marine products worth over $6 billion, with frozen shrimp accounting for a major share, according to data from the Marine Products Export Development Authority.
The increase in tariff from the existing 10% to 25% with effect from 1 August comes in addition to the countervailing duty at 5.77% and anti-dumping duties, to which seafood exported from India is subjected in the US, said K.N. Raghavan, secretary general, Seafood Exporters Association of India.
“While the increase in tariffs and differential rates applied to different countries have created an uneven playing field for seafood exporters from India, the lingering uncertainty due to the threat of imposition of additional duty as a penalty has added to the difficulties faced by them,” he added.
Raghavan added that the absence of clarity and certainty regarding the rate of import duty creates an environment that is not conducive to a smooth conduct of trade and commerce among countries.
Meanwhile, exporters of fresh fruits and vegetables are also bracing for impact of US tariffs.
Ekram Husain, vice president of the VAFA Fresh Vegetables and Fruits Exporters Association (Maharashtra), said that while this season’s mango shipments have already been dispatched, exports of pomegranates and other produce could be at risk.
“It is too early to say, but if the exporters don’t find viable, then they might hunt for new territories,” he added.
Experts point out that India’s dependence on a handful of export markets has come under renewed scrutiny after the latest US tariff salvo, highlighting the urgent need for market diversification, value addition and trade resilience.
“In response, India should engage in diplomatic negotiations with the US, explore new export markets in Asia, Africa and Latin America, and accelerate free trade agreements with other nations,” said Preet Sandhu, founder and managing director, AVPL International, a drone technology and precision agriculture technology firm.
She added that the ongoing challenges could catalyse a transformation towards a more competitive, self-reliant and globally integrated agri-economy in the long run.
M.K. Dhanuka, chairman, Dhanuka Agritech Ltd, an agrochemical company, said that the decision to impose a 25% tariff on Indian exports, coupled with other penalties based on India’s strategic alignments, brings a multi-dimensional layer of uncertainty to India’s agricultural economy.
“A fall in agri-export earnings due to excessive tariffs can itself weaken farmer morale, increase purchase cycles, and discourage investment in productivity-enhancing inputs,” he said.
In the longer run, this can stifle innovation in agriculture, when Indian agriculture needs to modernize at the earliest to stay competitive globally, he added.