Trump tariff exemptions explained: Indian tea, coffee and spice exporters stand to benefit — here is how

The United States recently announced the rollback of reciprocal tariffs on more than 200 food products, a decision that is likely to benefit Indian farmers and exporters.

While the Donald Trump administration's latest action is primarily aimed at keeping domestic US inflation in check, it is expected to assist Indian exporters of agricultural commodities, who have been facing a 50% tariff rate since late August.

According to a White House Executive Order issued on 12 November, agricultural products, including coffee, tea, tropical fruits, fruit juices, cocoa, spices, bananas, oranges, tomatoes, beef, and certain fertilisers, have been excluded from the reciprocal tariff system that took effect on 2 April.

The exemptions took effect on 13 November.

How agri products are expected to gain from tariff exemptions

India’s Commerce Ministry stated that while this tariff reduction applies to all trading partners, it establishes a level playing field for Indian exporters.

India currently exports these specific goods, which are valued at over $1 billion annually. These product categories encompass fruits and nuts, processed foods, spices, tea and coffee, essential oils, and vegetable and edible roots.

"Now our exports will have a level playing field," Joint Secretary in the Department of Commerce Darpan Jain said on 17 November.

Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), indicated that exports worth between $2.5 billion and $3 billion will gain from these tariff exemptions.

"This order opens space for premium, speciality and value-added products," Sahai said. "Exporters who shift towards higher-value segments will be better protected from price pressures and can tap rising consumer demand.”

Agneshwar Sen, Trade Policy Leader, EY India, told the Times of India, “Dropping the reciprocal tariffs on certain agricultural products by the US is a gain for Indian exporters. It cuts landed costs, making Indian agricultural goods price competitive against suppliers from Latin America and Southeast Asia.”

However, the think tank GTRI has suggested that India will only see a modest gain from the US policy shift.

Ajay Srivastava, Founder of GTRI, said that while the change in US tariff policy could marginally strengthen India's competitive position in spices and specialist horticulture, the broader benefits will primarily accrue to major farm exporters in Latin America, Africa, and ASEAN, unless India increases its scale, develops its cold-chain capacity, and diversifies its agricultural export basket.

"India has almost no presence in several of the largest exempted lines - tomatoes, citrus fruits, melons, bananas, most fresh fruits, and fruit juices," Srivastava said.

Officials involved in trade and farm export policy told Reuters that the exemptions also signal a positive outlook for the ongoing US-India trade negotiations and could alleviate the export pressure triggered by this year’s tariff increases.

Exports of Indian goods to the US fell by nearly 12% year on year in September to $5.43 billion after the tariffs were implemented. Indian farm exports, which are estimated to account for $5.7 billion of the country's $87 billion of exports to the US in 2024, were among those affected.