The exemptions took effect on 13 November and apply to goods that the US either does not produce at scale or cannot cultivate due to climatic constraints. For India, the step comes as exporters grapple with the fallout of steep US tariffs on several industrial categories and supply-chain disruptions triggered by shifting geopolitical alignments.
Why has the US exempted these products now?
The move reflects a mix of economic necessity and political calibration. Several of the exempted products—such as coffee, tropical fruits, spices and cocoa—form part of essential US supply chains with high import dependence. Unlike steel, aluminium, electric vehicles or solar components, these items do not affect US domestic manufacturing or farm lobbies, which are politically sensitive.
The exemptions are also viewed against the backdrop of Washington’s attempt to stabilise food inflation, diversify import sources and reduce exposure to adversarial supply chains. With volatile global agricultural prices and elevated logistics costs, exempting climate-dependent imports helps secure steady supplies without increasing consumer costs.
A second factor is US geopolitical signalling. President Donald Trump’s tariff strategy has targeted selected partners over perceived unfairness in market access, but the administration has also been keen to avoid shortages in categories where the US has limited domestic production capability.
Relaxing tariffs on climate-dependent imports allows Washington to partly soften the edges of its broader tariff war while maintaining strategic pressure on partners in other sectors.
What is India’s footprint in the exempted products?
India’s exports to the US in the newly exempted lines remain modest. In 2024, America imported $50.6 billion worth of these items from the world, but India accounted for only $548 million, or about 1% of that basket.
India’s presence is concentrated in a handful of high-value categories—pepper and capsicum preparations ($181 million), spice mixes including turmeric, ginger and curry blends ($83.7 million), anise and cumin seeds ($85 million), cardamom and nutmegs ($14.6 million) and tea ($68.5 million). These represent traditional strengths tied to India’s agro-climatic profile and global brand identity.
India has virtually no presence in many of the largest US import lines such as fresh tomatoes, citrus fruits, melons, bananas, tropical fruit juices and categories of fresh fruit where Latin American exporters dominate. In sectors such as coffee and cocoa beans, Africa and South America continue to lead global supply. The US imports tomatoes from Mexico at about $1 per kg for consumers, while the cost of producing 1 kg of tomatoes within the US is much higher, at about $3 per kg.
How do the tariff exemptions help Indian exporters?
The immediate gains for India will be small but strategically useful. Since most of these items already face intense competition and India’s export share is limited, exempting them from the reciprocal tariffs will not dramatically alter market dynamics in the short term.
What it does provide is a level playing field for Indian spices, tea, niche horticulture and select nuts—categories where Indian exporters already have a foothold and where tariff disadvantages could have eroded competitiveness.
Exporters will also see it as an opportunity to widen India’s footprint in specialty horticulture, organic spices, dehydrated ingredients, and certain processed foods where India can scale output with the right farm-gate support and cold-chain improvements.
According to Ekram Husain, chief executive officer of Essar Exports and vice-president of the VAFA Fresh Vegetables and Fruits Exporters Association (Maharashtra), exports of mangoes and pomegranates will increase as the reciprocal duty has been reduced to nil.
To be sure, India’s overall mango exports have fallen. Total exports of mangoes, excluding sliced dried mango and mango pulp, stood at $56.34 million in FY25, down 6.3% from $60.14 million in FY24.
In spices, the key beneficiaries of the duty reduction will be companies such as Everest, MDH, Aachi, Ramdev, ITC and Badshah Masala. India shipped more than $500 million worth of spices to the US in 2024, while tea and coffee exports were valued at close to $83 million.
However, basmati rice and seafood such as shrimp, which are among India’s largest agri-linked exports to the US, remain outside the exemption list.
The beneficiaries of the US exemptions will largely be Latin American, African and ASEAN suppliers unless India acts quickly to expand scale, invest in post-harvest infrastructure, build residue-free supply chains and diversify into climate-compatible fresh fruit categories.
What does this move mean for India’s trade strategy?
For India, the exemptions come at a politically sensitive time, with Washington applying pressure to curb India’s discounted oil purchases from Russia and New Delhi simultaneously facing stiff US tariffs on several manufactured products. The easing of duties on select agricultural products gives India a marginal bargaining chip in a complex trade environment.
Experts said the development underscores the need for India to rebuild its agricultural export competitiveness, especially in high-value fresh produce, spices, wellness-linked botanicals and processed foods. While India’s current presence in many US farm categories is negligible, improving cold-chain logistics, harmonising quality standards and accelerating farm-sector reforms could help India gradually move up the value chain.
Ajay Srivastava of the Global Trade Research Initiative said India must use this window to scale up production in globally demanded categories, while ensuring high-quality, consistent supply and low post-harvest losses. He added that without decisive policy support, the tariff relaxation will benefit competitors more than India.
The US tariff exemptions give Indian exporters a small but important opening in a few product lines where India is already strong. But the broader benefit will accrue only if India moves quickly to diversify its agricultural export basket, invest in cold-chain networks, improve quality compliance and push for higher productivity in agro-climatic zones capable of supplying the US market.
Without such structural improvements, the gains will remain limited—even as competitors consolidate their share.