The recent implementation of broad tariffs by the U.S. administration has significantly influenced international trade, particularly affecting the spice industry. Effective April 5, 2025, a baseline tariff of 10% has been applied to all imports, with higher rates for specific countries—20% on European Union nations, 34% on China, and 26% on India. India, a key player in the global spice market, is among the countries impacted, prompting U.S. businesses to reassess their sourcing strategies.

In this newsletter, we will explore the impact of this new policy on spice exports from India and what alternatives the U.S. businesses can consider.

India's Role in the U.S. Spice Market

According to IBEF, the value of agricultural exports from India to the USA in the financial year 2021-22 (April 2021 to March 2022) was approximately $5.7 billion USD, with the U.S. holding an 11.5% share of India’s total agricultural exports of $49.6 billion that year.

Similarly, according to the Spices Board of India, in the financial year 2021-22, India's total spice exports were valued at approximately $4.1 billion USD. The United States was among the top importers of Indian spices during this period. The USA accounted for 14% of India's spice exports in 2021-22.

The newly imposed tariffs are expected to increase procurement costs for U.S. importers, potentially leading to higher consumer prices and a search for alternative suppliers.

Exploring Alternative Spice Suppliers: Options for the U.S.

Given the current tariff landscape, U.S. importers may look to diversify their supply chains by considering alternative sources for key spices:

Cardamom: Guatemala is a major exporter, with exports totaling $384 million in 2023, far exceeding India's $15.6 million. Additionally, Colombia, another rising cardamom exporter, recorded 8,654 tonnes valued at $8,654,000 in 2023. (Guatemala reciprocal tariff: 10%)

Coriander: Morocco's coriander seed exports were valued at $13.1 million in 2023, compared to India's $120 million. Ethiopia also emerges as a potential supplier, with its 2023 spice exports including black cumin and coriander totaling 20,413 tonnes worth $40,157,000. (Morocco reciprocal tariff: 10%)

Turmeric: Ethiopia, with its growing turmeric exports, can serve as an alternative supplier. Ethiopia exported approximately 12,000 tonnes of turmeric worth $22.3 million in 2023, making it important in the global turmeric market. (Ethiopia reciprocal tariff: 10%)

Cumin: Turkey and Egypt are notable alternatives, with Turkey exporting $40.3 million and Egypt's exports estimated between $20-30 million in 2023. (Turkey reciprocal tariff: 10%, Egypt reciprocal tariff: 10%)

Black Pepper: Brazil's black pepper exports reached $269 million in 2023, positioning it as a significant supplier. (Brazil reciprocal tariff: 10%)

Chili Peppers: Mexico is a global leader in chili pepper production, exporting 45,237 tonnes valued at $120,483,000 in 2023. Chile, specializing in dried and smoked peppers like merken, exported 5,018 tonnes worth $15,349,000. Both serve as competitive alternatives to India for chili pepper imports. (Mexico: Nill, Chile reciprocal tariff: 10%)

Ginger: Peru has become a major ginger exporter, especially for organic varieties, with 2023 exports totaling 30,194 tonnes and valued at $85,672,000. (Peru reciprocal tariff: 10%)

However, certain spices pose greater challenges in diversification. For instance, alternative suppliers for high-quality specialty spices from India, such as some regional blends and proprietary cultivars, may not yet have the scale or consistency needed for U.S. demand.

Implications for U.S. Businesses and Consumers

The increased tariffs on Indian spices are likely to have ripple effects in the U.S. market. Importers may face higher procurement costs, which could be passed on to consumers through increased prices for spice products and related food items. This could impact the food industry, including restaurants and processed food manufacturers that heavily rely on these spices.

Challenges in Transitioning to New Suppliers

While diversification is a strategic response to tariff-induced cost pressures, it comes with challenges. Establishing new supplier relationships requires thorough quality checks, consistency evaluations, and compliance with regulatory standards. Logistics, including shipping times and costs, also play a crucial role in determining the feasibility of sourcing from alternative countries. Additionally, some alternative suppliers may not have the capacity to meet full U.S. demand, potentially leading to supply constraints.

Solutions Available

Tradologie.com can be an ideal partner in facilitating global export-import of agro commodities amid these shifting tariff dynamics. It has a presence in 100+ countries and has facilitated a global agro trade of USD 8 billion till date.

Conclusion

The U.S. spice import sector is at a critical point, requiring a strategic shift toward diversified sourcing. By evaluating and engaging with alternative suppliers, U.S. businesses can mitigate the financial impact of current tariffs and strengthen the resilience of their supply chains in a rapidly evolving global trade environment.