India may gain slight edge as US exempts several agri products from reciprocal tariffs: GTRI report

New Delhi [India], November 15 : India is expected to gain a small edge as the US administration has exempted agricultural products from the reciprocal tariffs it had imposed on several countries, said trade think tank GTRI.

The United States has removed a set of agricultural products from the reciprocal tariffs introduced earlier this year, meaning these items will now face only the standard MFN duties.

A White House Executive Order issued on November 12 excludes coffee, tea, tropical fruits, fruit juices, cocoa, spices, bananas, oranges, tomatoes, beef and certain fertilizers from the April 2 reciprocal tariff regime, according to a Global Trade Research Initiative (GTRI) report put out on Saturday.

The exemptions took effect on November 13. These goods are either not produced in adequate quantities domestically or depend on climate conditions the US cannot replicate, GTRI has asserted.

For the tariff-exempt products identified in the order, India today supplies only USD 548 million of America's USD 50.6-billion import basketreflecting a narrow export footprint dominated by a few winners, GTRI noted.

US' demand for these items is heavily concentrated in categories.

India's exports to the US are concentrated in a handful of high-value spices and niche products: pepper and capsicum preparations (USD 181 million), ginger-turmeric-curry spices (USD 84 million), anise and cumin seed categories (USD 85 million), cardamom and nutmeg (USD 15 million), tea (USD 68 million), and modest quantities of coconuts, cocoa beans, cinnamon, cloves, and fruit products.

"But India has almost no presence in several of the largest exempted linestomatoes, citrus fruits, melons, bananas, most fresh fruits, and fruit juices," GTRI noted. It's not clear yet whether Indian exports will be exempt from 25 per cent reciprocal tariffs or full 50 per cent tariffs.

"The shift in U.S. tariff policy could marginally strengthen India's competitive position in spices and niche horticulture, but the broader gains will accrue mainly to major Latin American, African, and ASEAN farm exporters unless India expands scale, builds cold-chain capacity, and diversifies its agricultural export basket," GTRI concluded.

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