Impact of Trump’s Tariff policy on Indian’s Agricultural Exports

The recent proposal by US President Donald Trump to impose reciprocal tariffs is aimed at addressing the increasing US trade deficit and aligns with the broader “America First” policy. This policy brief assesses the potential implications of reciprocal tariffs on India’s agricultural exports, analysing key trade trends, tariff disparities, and non-tariff barriers. While India has historically relied on protective tariffs to safeguard domestic farmers, retaliatory measures from the U.S. could reduce market access for Indian agricultural products. The challenge for India is to balance domestic agricultural interests while ensuring that trade relations with the US remain stable. Overall, it seems that in case of reciprocal tariffs in agriculture, India’s agri-exports to US may come down and its imports from US will go up, thereby reducing or even wiping out the agri- trade surplus to mitigate these challenges and sustain long-term export growth, India must transition from tariff-based protectionism to productivity-driven competitiveness. This brief outline three key policy recommendations as phased tariff reduction on select outlier commodities, increased investment in agricultural research and development (R&D) to enhance yields and competitiveness, and strengthening agricultural value chains to boost exports. By adopting these strategies, India can navigate the evolving global trade environment while ensuring the resilience and growth of its agricultural sector.

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