India has to revise downward very ‘high imports’ duties of agri-commodities including rice, seafood, poultry meat, skimmed milk powder without impacting the domestic farm sector, trade experts said.
Experts say that ongoing global tariff war could open new markets for Indian agri-exports. Shweta Saini, agricultural economist, said soybean meal exports from India could become more competitive if countries imposed stiff tariffs on the US, a major exporter of animal feed.
Last month, China announced retaliatory tariffs of 15% on a range of American products, including soybean. In 2024, China accounts for half of the US’s soybean exports valued at $ 12.8 billion.
India’s rice exporters could expand the market further taking advantage of relatively higher duty imposed by the United States on Vietnam, Thailand and Pakistan.
“If India faces 27% import duty, but Vietnam faces 46% and Thailand (36%) and Pakistan (29%), India would thus be a gainer,” Ashok Gulati, agricultural economist and former chairman, Commission for Agricultural Costs and Prices said. India has been the biggest rice exporter in the world since 2012.
Gulati said one has to work out commodity by commodity to boost exports potential of agriculture produce. “80% of Indian agriculture is reasonably competitive and we are net exporters of agri-products over the last 20 years,” he said while advocating a sharp reduction in import duty of 70% on rice which would not have any impact on domestic trade.
However, currently India has imposed a 40% import duty of wheat, which the government has refused to reduce citing adequate domestic supplies.
Several agricultural products agricultural products facing high tariff differentials include food preparation (currently at 150% ), walnut (100%) dairy products- cheese and skimmed milk powder (30-63%), and cut chicken legs (100%).
According to ICRIER paper, instead of tariff protection, India must focus on right instruments such as enhancing productivity and modernizing its agricultural value chains to remain globally competitive in agricultural produce. It has proposed expanding cold storage capacity, upgrading logistics infrastructure, and ensuring better quality certification and traceability to boost the export potential of India’ agricultural products.
The US trade representative (USTR) earlier in the week had raised concerns about India’s minimum support price (MSP) by stating that it provides excessive subsidies for production of wheat and rice, potentially distorting global trade. India has stated that MSP policy aims to support farmers and ensure food security.
USTR also criticised non-approval of genetically modified food which had delayed US biotech exports to India. India does not allow GM crops imports while in 2021 for meeting domestic animal feed needs, it had allowed imports of 1.2 million tonne of GM soymeal from the US.
IT stated that India maintains high tariffs on a wide range of agri-produce including vegetable oils (45%), apples and corn (50% ), flowers (60%), natural rubber (70% ), coffee, raisins, and walnuts (100%) and alcoholic beverages (150%).
India has maintained that its tariffs are within the overall limit of WTO regulations, while expressing its willingness to negotiate with the US on a bilateral basis.
The US had a share of 35% of the country’s seafood exports. KN Raghavan, secretary general, Seafood exporters association of India, told FE that current import duties of 30% on seafood could be abolished with the exception of fish varieties such as basa from Vietnam and Sardine from Gulf countries, for protecting domestic fishing communities.