US Tariffs: Ashok Gulati, a well-known Indian agricultural economist and professor at the Indian Council for Research on International Economic Relations (ICRIER), said that India is unlikely to face major losses in its agricultural exports due to new tariffs announced by US President Donald Trump.
In fact, he stated that if India negotiates wisely during bilateral trade talks with the US, it could even gain some ground.
Gulati said, “If competing countries face lower tariffs than India, then India may lose in that product exports. Overall, it seems India may not lose much in agriculture. But if we negotiate smartly in BTA, we may gain.”
Gulati also explained that the impact of these tariffs will not be the same for all agricultural products. The final outcome depends on various factors, including how the US sets tariffs on India and other competing countries.
US Tariffs: What Else For Indian Agriculture Sector?
Under the new policy, Indian agricultural exports to the US are currently subject to a 27% tariff (as per the trade document). However, what really matters is how these tariffs compare with those applied to countries that compete with India in the same product segments.
For example, in the case of rice, if Indian rice is subject to a 26% tariff, but rice from competitors like Vietnam and Thailand face even higher duties, then India could actually benefit. On the other hand, if those countries face lower tariffs, India might lose market share in the US.
Gulati added, “The impact of Trump’s tariffication is going to be quite varied across different agri-commodities. To estimate the likely impact, one needs to look at not only the tariff rate on Indian exports (26%), but also on the tariff rates on competing countries’ exports to US.”
Gulati emphasized that the key lies in strategic negotiation. If India is able to strike a favorable bilateral trade agreement (BTA) with the US, it can possibly turn the tariff challenge into an opportunity. “Overall, it seems India may not lose much in agriculture,” he said, adding, “but if we negotiate smartly in the BTA, we may gain.”
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