US President Donald Trump’s decision to roll back reciprocal tariffs on 200-odd food products in the face of disquiet among US consumers about the high cost of groceries is going to bring modest cheers to Indian tea exporters, even as the executive decision would translate to limited benefits to the country’s wider export basket.
India exported 16.8 million kilograms of tea, worth ₹671.32 crore, to the US in 2024 at an average price of ₹399.6 a kg, registering a growth of 28 per cent, outpacing the broader tea export increase of 9.9 per cent over 2023, according to Indian Tea Association data.
“This is certainly a big relief. Exemptions are effective immediately, including all in-transit shipments by air or ship,” Bala Sarda, founder and CEO of Vahdam Tea, which counts the US as its largest market, said.
US imports both CTC (crush, tear, curl) and high-value orthodox teas from India. Sri Lanka, Vietnam are some of the other exporters of tea to the US. Anshuman Kanoria, chairman of the Indian Tea Exporters Association, said the order appeared to indicate that the tariff has been lifted, but restrained his exuberance before a confirmation from the commerce ministry.
“Tea is in the annex-II of the executive order White House posted on its website, indicating that the reciprocal tariff is lifted on the item irrespective of trade treaties with the exporting countries. But I am waiting for the ministry to confirm,” Kanoria said.
Limited gains An analysis by trade intelligence firm Global Trade Research Initiative (GTRI) argued that India’s wider export basket would see limited gains from the latest Trump diktat.
“For the tariff-exempt products identified in the order, India today supplies only $548 million of America’s $50.6-billion import basket — reflecting a narrow export footprint dominated by a few winners,” GTRI founder Ajay Srivastava said.
India’s exports to the US are concentrated in a handful of high-value spices and niche products: pepper and capsicum preparations, ginger–turmeric–curry spices, anise and cumin seed categories, cardamom and nutmeg, apart from tea and modest quantities of coconuts, cocoa beans, cinnamon, cloves and fruit products. (see chart)
But India has almost no presence in several of the largest exempted lines — tomatoes, citrus fruits, melons, bananas, most fresh fruits and fruit juices, Srivastava noted.
He also pointed out that it is not clear yet whether Indian exports will be exempt from 25 per cent reciprocal tariffs or full 50 per cent tariffs, which include a penalty for buying Russian oil.
Sarda, however, took note of Trump’s recent comments to argue the penalty tariff would soon be withdrawn, given India has significantly cut down oil purchases from Moscow.