India's farm exports may withstand US tariffs as competitors face steeper duties: Economist Gulati

New Delhi, Apr 3 (PTI) India could maintain or even expand its agricultural exports to the United States despite the new tariffs announced by President Donald Trump, as the competing nations face even steeper duties, prominent agricultural economist Ashok Gulati said on Thursday.

The 26 per cent "discounted reciprocal tariff" on Indian goods imposed by Trump would have limited impact on key agricultural exports such as seafood and rice when compared to higher duties imposed on the regional competitors, according to Gulati, former chairman of the Commission for Agricultural Costs and Prices (CACP).

"We should not look at the tariff increase in absolute terms, but see relative tariff increases with our competitors," Gulati told PTI.

He noted that while India faces 26 per cent tariffs, China faces 34 per cent, creating an 8 per cent differential advantage for the Indian exporters.

Other competitors face even steeper barriers, with Vietnam at 46 per cent, Bangladesh 37 per cent, Thailand 36 per cent, and Indonesia at 32 per cent.

For seafood exports, particularly shrimp, Gulati explained that India's relative tariff advantage combined with shrimp's small share in the overall US food expenditure means the demand is unlikely to shrink significantly.

The general secretary of Shrimp Feed Manufacturers Association of India, Gulrej Alam, said India is a major exporter of shrimp to the US, with about half of the country's total annual export of 9 lakh tonnes shipped there.

"There will be a little setback in the short term because of a lower tariff of 10 per cent imposed on Ecuador, which is also one of the major shrimp exporters to America," Alam said, adding that this will be a cause of concern for Indian shrimp production.

Located close to the US, Ecuador has a logistical advantage. However, India has bulk handling capacity and better quality packing, Alam noted.

"In the short term, the trade will see re-routing. However, in the long term, trade will not be a challenge," he added.

Similarly, for rice exports, where current US tariffs are 9 per cent, India maintains a competitive edge against Vietnam and Thailand despite the increase to 26 per cent.

Vijay Sethia, a former president of the All India Rice Exporters Association, said India exports 250,000 to 300,000 tonnes of rice annually to the US.

"The 26 per cent tariff on all varieties of rice will definitely slow down our exports in the short term but will capture its space in the long term," Sethia said, adding that the duty hike will ultimately hurt the American consumers.

Gulati, currently chair professor for agriculture at the Indian Council for Research on International Economic Relations (ICRIER), suggested that India could potentially gain market share in spaces vacated by higher-taxed competitors. PTI LUX ARI

Source: PTI