The US President Donald Trump’s tariff measures, which had been troubling the government as well as investors and traders from day one, are finally showing signs of easing. Recently, Trump announced a rollback on more than two hundred food items. Even though the final trade deal between the US and India is still being negotiated, this update is a positive development for several Indian sectors. It also raises hope that the high tariff burden could be reduced further in the coming months.
Let us break down this latest development and understand how it can create potential opportunities for investors.
What’s Happening?
The US President Donald Trump has rolled back import duties on nearly 200 food and agricultural items after facing pressure from rising prices at home. The move comes at a time when American voters are increasingly frustrated with the cost of living.
Trump signed the rollback through an executive order as part of a broader effort to ease price pressures. He has also proposed using tariff revenue to offer $2,000 rebate checks to households and has ordered a probe into the meat packing industry after widespread public anger over high food costs.
Compared to many other nations, India still faces a significant 50% tariff on exports to the US and continues to import Russian crude oil despite being informed to stop importing Russian crude.
Indian Agri Shipments to Benefit from Tariff Cuts
The rollback immediately helps several Indian products become cheaper in the American market. Items such as coffee, cashew nuts, tea, and a wide range of spices are among the biggest beneficiaries.
Indian spice exports to the US were valued at over $500 million in 2024. Tea and coffee shipments added another $82.5 million. Cashew nuts have also benefited from the rollback. The US imported $843 million worth of cashews from around the world, and India supplied about one-fifth of this demand.
Looking at the broader picture, the exempted products made up close to 40% of India’s total goods exports of $86 billion last year, and overall, the tariff relief applies to over $1 billion worth of agricultural shipments from India.
Indian Exports Still Outside the Tariff Relief
While many agricultural products gained from the recent US tariff cuts, some major Indian exports remain excluded. Indian seafood items, including shrimp, have not received any relief, even though they form a large export category for India. In FY25, India exported around 3,42,534 tonnes of seafood to the US, worth about $2.68 billion, and continued to be the biggest supplier even after new tariffs were introduced in August 2025.
Basmati rice has also been left out of the rollback. India shipped 2,70,000 metric tonnes, valued at roughly $300 million in FY25. The 50% tariff on basmati has not yet caused a major loss of market share, but it may slow future growth.
Additionally, gems, jewellery, and apparel also remain under the 50% tariff regime. Since then, exporters have been exploring alternative markets, including China, the European Union, and Southeast Asia, to reduce their dependence on the US.
A final trade agreement is still pending, and the US has linked progress to India cutting back on Russian oil imports and increasing purchases of American energy.
What Does This Mean for Investors?
For investors, the tariff rollback signals a clearer opportunity in India’s agricultural and food export sector. Lower duties make products like spices, tea, coffee, and cashew nuts more competitive in the US, which can support higher export volumes and improved margins for listed players in these categories. Companies involved in processed foods and specialty agri products may also see stronger demand as their goods become more affordable for American buyers.
Government officials highlighted that nearly fifty processed food items stand to gain the most. A final trade agreement is still pending between India and the US, and once it is finalised, the overall market may get a significant boost.
What Next?
As mentioned in Livemint, Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), said the tariff rollback could open a $2.5 to $3 billion boost for Indian exporters. The new duty relief creates space for premium and value-added products. Exporters who move into higher-value segments may be better protected from price pressures and can tap into growing demand in the US market.
Ajay Srivastava of the Global Trade Research Initiative told Reuters the change will slightly strengthen India’s position in spices and niche horticulture and may help revive demand that was lost after tariffs were raised. As of September 2025, Indian exports to the US had fallen to $5.43 billion, a 12% YoY drop after duties climbed to 50%.
Furthermore, Trump has said tariffs on India will be lowered very substantially as both countries work toward a trade deal. According to Livemint, the tariff could be reduced to around 15%–16%, from the current 50%, with the agreement expected to be announced soon.
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
