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US Removes Reciprocal Tariffs on Key Agri Goods; India Cautiously Optimistic
US-India Tariff: The United States has decided to reduce tariffs on agricultural goods. India has welcomed this decision. The Commerce Ministry stated that the decision to withdraw reciprocal tariffs on certain agricultural products, such as tea, coffee, and spices, has become effective from November 13th. India is expected to benefit from this decision.
The Union Commerce Ministry exuded confidence that India will gain from the US decision to slash reciprocal tariffs on specific agricultural produce. On India's gains from the cut, the Commerce Ministry said that these exemptions, applicable from November 13th, would extend to all trading partners. This also creates a level playing field for Indian exporters.
It should be noted that the White House issued an executive order on November 12th. India responded to this on Monday. Responding to a question from reporters, Darpan Jain, Joint Secretary in the Department of Commerce, said, "Now our exporters will have a level playing field." However, the think tank GTRI believes that this move by the US will only bring marginal benefits to India.
India's presence in categories such as tomatoes, citrus fruits, melons, and bananas is minimal. Ajay Srivastava, founder of GTRI, said, "India's presence is almost negligible in many categories, such as tomatoes, citrus fruits, melons, bananas, most fresh fruits, and fruit juices. The US has decided to grant the largest exemptions to these categories."
Srivastava said that the change in US tariff policy could slightly strengthen India's position in the spices and specialty horticulture sectors. However, the broad benefits will primarily accrue to major Latin American, African, and ASEAN agricultural exporting countries. He said, "Unless India expands its scale, builds cold-chain capacity, and diversifies its agricultural exports, it is futile to expect significant benefits."
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It should be noted that India exports goods worth over US$1 billion annually. These products include fruits and nuts, processed foods, spices, tea and coffee, essential oils, and vegetables, as well as root vegetables used in food and beverages.
It is noteworthy that on November 12, the White House said in its executive order - coffee, tea, tropical fruits, fruit juices, cocoa, spices, bananas, oranges, tomatoes, beef and some fertilizers have been excluded from the reciprocal tariff arrangement. Let us tell you that after assuming the presidency in January this year, Donald Trump had announced the imposition of tariffs on many countries from April 2. However, after seven months, an exemption was also announced from November 13.
