US Tariffs May Hit Indian Pharma, Agri Exports

The hardest-hit segments in agriculture would be fish, meat, and processed seafood, with $2.58 billion in exports in 2024, facing a 27.83 per cent tariff differential. Shrimp, a major export to America, will become significantly less competitive

New Delhi: Goods from sectors, including agriculture, precious stones, chemicals, pharma, medical devices, electricals, and machinery may get impacted if the US will go ahead with imposing reciprocal tariffs on Indian products, according to experts.

They said that these sectors could face additional customs duties from the Trump administration because of the high tariff differential or gap, which is the difference between the import duties imposed by the US and India on a product. At the broad sector level, the potential tariff gaps between India and the US vary across the sectors. The gap is 8.6 per cent for chemicals and pharmaceuticals; 5.6 per cent for plastics; 1.4 per cent for textiles and clothing; 13.3 per cent for diamonds, gold, and jewellery; 2.5 per cent for iron, steel, and base metals; 5.3 per cent for machinery and computers; 7.2 per cent for electronics; and 23.1 per cent for automobiles and auto components.

“The higher the tariff gap, the worse affected a sector could be,” an exporter said. US President Donald Trump has said that the tariff announcements, scheduled for early morning Wednesday (India time), will amount to a ‘Liberation Day’ for the US. According to an analysis of the think tank Global Trade Research Initiative (GTRI), the hardest-hit sector in agriculture would be fish, meat, and processed seafood, with $2.58 billion in exports in 2024, facing a 27.83 per cent tariff differential. Shrimp, a major export to America, will become significantly less competitive due to the imposition of the US tariffs.

“Already our exports have antidumping and countervailing duties in the US. The additional hike in tariffs will make us uncompetitive. Out of India’s total shrimp exports, we ship 40 per cent to America,” Kolkata-based seafood exporter and MD of Megaa Moda Yogesh Gupta said. He said that Indian exporters may get some relief if the US will impose similar tariffs on competitor countries - Ecuador and Indonesia. India’s processed food, sugar, and cocoa exports may also face heat as the tariff gap is 24.99 per cent. Its exports stood at $1.03 billion last year. Similarly, cereals, vegetables, fruits, and spices ($1.91 billion shipments) have a tariff differential of 5.72 per cent between. Dairy products, with exports worth $181.49 million, could be “severely” affected by a 38.23 per cent differential, “making ghee, butter, and milk powder costlier and reducing their market share in the US,” GTRI Founder Ajay Srivastava said.