The US has temporarily paused the reciprocal tariffs for 90 days while maintaining the 10% baselines on countries. Now, what’s next?? A sense of FOMO has gripped many exporters, causing panic as they scramble to secure export orders from the US, uncertain of what the future holds.

However, if you are among those food exporters who are heavily reliant on the US market, now is the time to diversify your exports. It’s high time to explore other markets that exhibit comparable or substantial demand for your commodities.

Through this newsletter, we will deeply understand the important facts on this topic. We will do an extensive analysis of the situation commodity wise. So, let’s get started. 

Rice Exports: ndia exported a value of USD 304.78 Million of Basmati Rice in 2023-2024, and USD 30 Million of non-basmati rice to the US markets. This indicates the enormous amount of Basmati rice India exports to the US. Anticipating a scenario where Vietnam and Thailand continue to face higher tariffs than India, then the potential remains strong for India to capitalize on new export opportunities that might probably be unlocked. However, for rice exporters, it would indeed be prudent to diversify rice shipments to markets like Saudi Arabia, Iran, Iraq, the Yemen Republic, and the UAE, where there is substantial demand and considerably lower import duties.

Spices: The US is one of the significant markets for Indian spices. There is an enormous demand for spices like Turmeric, Cumin, Chilli, Black Pepper, Cardamom, etc. According to IBEF, the USA imported spices worth ₹5,136 crore (US$ 594.82 million) from India until December 2024.

In the event there is a similar or higher reciprocal tariff on India, the US can turn to Brazil at 10% for Black Pepper, Guatemala at 10% for Cardamom, and Egypt at 10% for Cumin. On the other hand, the US might continue to rely on Turmeric and Chilli as competing exporters are saddled with higher tariffs.
For the diversification in exports, the exporters can look to Canada, UK, Germany, and Japan for Black Pepper. For Cardamom, exporters can cater to Saudi Arabia, the UAE, and the European Union. For Cumin, China holds enormous demand, followed by Bangladesh, UAE and Vietnam.

Dairy Products:  According to the latest available data, India exported USD 272.64 millions worth of dairy products to the global markets. It exported dairy products worth $179.95 million to the United States during the fiscal year 2023–24. This might not be a figure as significant as other commodities, however, it still holds paramount significance. Though not equivalent, UAE imported around $80.79 million worth of dairy products, eggs, honey, and other edible products. 
In the case of situations where the US reinforces heavy reciprocal tariffs on India, exploring UAE’s market for Indian dairy exporters would be a good option. Given the geographical proximity, it also provides ease of shipping and logistics. 

Seafood Exports to the U.S.:  The United States remains a pivotal export destination for Indian seafood, particularly shrimp. This seafood makes a gigantic 40% of India’s seafood consignments to the U.S. While the imposition of a 26% tariff presents a significant hurdle, still India may preserve its strategic advantage. This is mainly because competing exporters like Vietnam and China have even more prohibitive tariffs, 46% and 34% respectively. This tariff gap could potentially prove to India’s advantage and may even catalyze a surge in its seafood volumes headed to the American marketplace.

Conclusion:

In conclusion, while the temporary pause in reciprocal tariffs offers a short-term relief, it is crucial for Indian agro exporters to diversify their markets to mitigate future uncertainties. By exploring emerging markets and strengthening their presence in regions with growing demand, exporters can safeguard their businesses and seize new growth opportunities across various commodity sectors.