US Withdraws 50% Tariff on India’s Tea, Coffee & Spices Amid Rising Food Prices

The United States has rolled back the 50 percent reciprocal tariff on several Indian agricultural goods, including tea, coffee, spices, tropical fruits, and fruit juices — a move that provides massive relief to Indian exporters. The decision comes amid growing pressure on the Trump administration as food prices continue rising across the US.

The tariff was originally imposed in response to India’s continued import of Russian crude oil. With inflationary pressures mounting, Washington has now eased the measure, offering Indian exporters duty-free access worth nearly USD 1 billion (₹9,000 crore).

A Big Boost for India’s Export Sector

The Commerce Ministry announced on November 17 that the tariff withdrawal will help restore competitiveness for Indian products that had become costlier due to the duty hike. The Directorate General of Foreign Trade (DGFT) noted that high tariffs were hurting sectors such as spices, processed foods, and fruit-based products.

In FY25, India exported USD 2.5 billion (₹22,000 crore) worth of agricultural goods to the United States. With the duty removed, nearly USD 1 billion worth will now enter the US market at zero tariff.

Trade Deal in Final Stages

The development also comes as India and the US move closer to finalizing a long-awaited bilateral trade agreement. Commerce Secretary Rajesh Agarwal confirmed that talks have made “significant progress,” with key issues nearing resolution — including market access demands and the reciprocal tariffs imposed by both nations.

Negotiations, ongoing since February, are now reportedly in their concluding phase.

India’s Strong Position in the US Market

India exported USD 86.51 billion (₹7.66 lakh crore) worth of goods to the US in FY25. Major contributors include textiles, jewelry, machinery, and engineering goods. Government estimates suggest that high US tariffs had affected nearly USD 48.2 billion (₹4.3 lakh crore) of Indian exports.

Direct Gain for Agricultural Exports

DGFT Director General Ajay Bhadoo confirmed that the rollback will immediately benefit agricultural exports worth USD 1 billion. He said the move would help high-potential sectors—such as spices, processed foods, and beverages—expand further in the US market.

The Commerce Ministry expects the development to strengthen India–US trade ties and improve the overall trade balance.