Zero tariff access expected to significantly boost India’s agriculture exports to the US: SBI report

India's agricultural exports to the United States are expected to experience strong growth because most products will enter the US market without any new tariffs. Zero tariffs will completely revolutionise the agricultural trade system in India through their implementation.

Here’s how zero tariffs can transform India’s agricultural trade

• The SBI report states that 75 per cent of India's agricultural exports to the US will now face zero additional import duty.
• The American market will become more accessible to Indian products because of lower tariffs, which will improve price competitiveness for these goods, ANI reported.
• India exports more farm products to the US than it imports, which creates a $1.3 billion agricultural trade surplus with that country.
• The zero-duty access system will apply to a significant part of agricultural exports, which total $1.36 billion.
• Products worth over $1.03 billion will benefit from guaranteed zero reciprocal tariffs, which will enable farmers and exporters to boost their shipment volumes.

Major products that will benefit:

Rice

• Rice has emerged as the strongest winner of the competition.
• The United States imports a large portion of its rice supply from India.
• India supplies nearly 24-25 per cent of the total US rice imports.
• Indian rice will achieve greater export success and increased farmer income through competitive pricing that results from the elimination of all import tariffs.

Spices, tea and coffee

• India currently holds approximately 3 per cent share of US tea, coffee, mate and spice imports.
• Lower tariffs will enable Indian plantation products to achieve greater market presence.
• The initiative will assist tea and coffee producers as well as spice agriculturalists.

Fisheries and seafood

• The United States receives approximately 10 per cent of its seafood imports from India.
• Earlier high tariffs affected this sector.
• The implementation of an 18 per cent tariff reduction will enhance competitive abilities while supporting export recovery.
• The United States imports fish and aquatic products worth approximately $18.8 billion, with India supplying $1.8 billion of that total.

Big market opportunity ahead

• The total US imports for selected agricultural categories have a market value of approximately $82 billion.
• India’s share in these categories is about $2.8 billion, or 3.5 per cent.
• The evidence demonstrates that substantial opportunities exist for business growth.
• Improved tariff access will enable India to boost its market presence while establishing itself as a dependable agricultural provider.

Overall impact

• Decreased tariffs lead to lower product prices in markets.
• Indian products become cheaper, which increases their marketability and results in increased sales.
• The farmers and exporters receive higher total income through increased export activities.

The move is expected to:

• Strengthen India’s agricultural trade surplus
• Increase farmer incomes
• Improve export competitiveness
• Create long-term growth opportunities for farmers

The new tariff system will provide substantial assistance to India's agricultural sector because it will enable Indian products to compete better in the US market. This development will lead to increased product demand which will result in higher export levels and improved farmer incomes while creating bigger growth prospects.

With agency inputs