Crime Today News
Basmati Rice Spilling from Sack – basmati rice spilling from burlap or jute sack.
| Photo Credit:
TRAVELLINGLIGHT
Even as exporters of marine products, spices, Ayush and herbal products, animal casings and basmati rice — some of the top items in India’s agriculture export basket to the US — are debating how the reciprocal tariff of 27 per cent announced by the US would affect them, the government does not foresee any immediate adverse impact. It hopes to implement the India-US bilateral trade agreement (BTA) within next 6 months by working overtime which could take care of the tariff situation.
Most of the agri products exported to the US were earlier subject to import duties of 0-10 per cent import duty, which would now be 27 per cent, excluding the anti-dumping duty wherever levied, sources said. The US had the largest share of 16.32 per cent among all export destinations in all the agri products that India exported worth $ 24.74 billion in 2023-24.
However, as the BTA may take its own time, since it involves multiple rounds of negotiation and discussion, exporters are worried about the enhanced tariffs to be implemented on April 5 (10 per cent baseline tariff) and April 9 (country-specific tariff of 27 per cent to replace baseline tariff). Exporters of non-ethnic agri products are worried more than those exporting specialised products like basmati rice where there is no competition.
Basmati rice may gain
In case of basmati rice, which is grown only in India and Pakistan, there may not be any competition for Indian brands since the tariff for Pakistan is even higher at 30 per cent.
In the list of items shipped to the US worth $ 1.5 billion in 2023-24 (comprising 27 agri-products basket promoted by Agricultural and Processed Food Products Export Development Authority, basmati rice was on top with a share of 20.32 per cent (or $ 304.78 million), followed by miscellaneous preparations like biscuit and namkeen ($ 237.78 million), natural honey ($ 148.57 million), cereal preparations like papad, sooji, pasta and noodles ($ 130.2 million) and processed vegetables such as ready-to-eat or ready-to-cook items ($ 110.57million).
“Trading houses in India will see opportunity in sourcing after this country-specific duty levied by the US to survive in the business rather than sticking to an Indian product. If there is a demand for rice and the US buyer is least interested in origin of the product, exporters will look for the grain from where it will be cheaper to sell in the US, and it may be sourced from Brazil or any other country,” said a trade policy expert. The US has imposed a lower reciprocal duty of 10 per cent on Brazil.
“The price and quality arbitrage have emerged as one of the biggest opportunities, after implementation of tariff in the US, for such Indian companies with sourcing strength, finance and risk management system,” said S Chandrasekaran, a foreign trade policy expert.
Ruling out any retaliatory duty in agri basket in particular even as a short term measure, sources said India hopes to sign the BTA in next six months, before September. The government is keeping a close watch on the consumer behaviour in the US as to whether they will be ready to absorb the duty hike or there will be a dip in demand for the Indian products, the sources said and the situation is highly volatile now.
TPCI Chairman Mohit Singla said that not much impact is seen on most Indian products as tariff has been kept very high for most of the competing countries. However, in the agri sector there might be few market diversifications — such as in shrimp export, some business might go to Venezuela or in tea to Sri Lanka and Kenya. In the long run, Indian companies will be pushed to better efficiencies and quality products, Singla added.
Published on April 3, 2025
📰 Crime Today News is proudly sponsored by DRYFRUIT & CO – A Brand by eFabby Global LLC
Design & Developed by Yes Mom Hosting
