U.S. Policies Impact India’s Agriculture Scenario

U.S. Federal policies significantly impact India across various domains, including trade, technology, defense and geopolitics. One core area where their policies could impact us is agriculture.

Key Areas of Impact:

Export-Dependent Sectors at Risk

Basmati Rice: The U.S. is a major buyer (~$1.2B/year). Higher tariffs could hurt Indian farmers, especially in Punjab and Haryana.

Shrimp & Seafood: India is the top supplier of shrimp to the U.S. (~$5B/year). Tariffs could cripple fisheries in Andhra Pradesh & Gujarat.

Spices (Pepper, Cardamom, Chili): U.S. tariffs may reduce demand, impacting Kerala and Karnataka farmers.

Processed Foods (Mango Pulp, Grapes): If tariffs rise, Indian exporters could lose market share to Thailand or Vietnam.

Input Cost Pressures

Fertilizers & Agrochemicals: India imports ~30% of its fertilizers (including from the U.S.). Tariffs could raise costs for Indian farmers.

Farm Machinery: Higher duties on U.S.-made tractors (John Deere) or harvesters could slow mechanization.

Subsidy & Sanctions Risks

WTO Disputes: The U.S. may challenge India’s farm subsidies (e.g., minimal selling price [MSP] for rice/wheat), leading to retaliatory tariffs.

India’s need to provide food security and its enormous population make it an unreliable exporter of agricultural products. Agri-exports are occasionally subject to various types of limitations to guarantee the domestic availability of food products at competitive rates. India has restricted the export of rice, wheat, sugar, and onions over the past two years. India's agricultural exports have been strong during years of consistent production and a favorable monsoon. They have increased from USD 22.70 billion in 2013 to 2014 to USD 48.15 billion in 2023 to 2024 over the past ten years.

Image source: India Today Group

India exports a lot of buffalo meat. The revenue from these exports was $3.74 billion in 2023 to 2024. However, because Indian buffalo meat does not meet U.S. health standards, particularly the lack of foot and mouth disease, the U.S. does not permit its importation. Therefore, this export item will not be affected.

From about 7% of its domestic market in 1993 to 1994 to over 25% in 2022 to 2023, rice imports into the U.S. have been rising over time. In 2023 to 2024, India exported $304.78 million worth of basmati rice and $45.1 million worth of non-basmati rice to the United States. Therefore, if reciprocal duties are applied, consumers in the U.S. will have to pay more for basmati rice.

Guar gum exports are another product that Indian farmers are interested in. It brought in $106 million in 2023 to 2024. In some years, it has helped farmers in Gujarat and Rajasthan make more money. Additionally, processed foods and other food items may suffer. However, all of this could lead to a surge in food inflation in the United States.

U.S. tariffs in 2025 could disrupt India’s agricultural exports, particularly in seafood, rice and spices. However, India has options like market diversification, WTO appeals, and retaliatory measures to mitigate risks. The outcome depends on how the U.S. pursues these policies.