When U.S. President Donald Trump recently imposed a steep 50% tariff on imports from India starting August, Prime Minister Narendra Modi assured that Indian farmers’ interests would not be compromised. The External Affairs Minister too echoed the same concern. Such assurances are welcome, but the real question remains: how much will Indian farmers actually be affected by Trump’s tariff, and which groups of farmers are at risk?
Tariffs raise the prices of Indian goods in the U.S., which can make them less competitive, leading to a fall in exports. If exports decline, producers in India—farmers among them—face shrinking demand, reduced production, and falling incomes. This, in turn, could impact jobs and GDP growth. Yet, when we examine the data, it becomes evident that the scale of the problem for farmers is far smaller than political rhetoric might suggest.
India’s exports to the U.S. in 2024 were worth $7.75 billion. Out of this, agricultural exports were only $621 million, which is just 8%. Moreover, agricultural exports to the U.S. have already been falling for reasons unrelated to tariffs: $666 million in 2022 dropped to $581 million in 2023, before Trump’s latest move. Clearly, declining agricultural exports to the U.S. are not new, and Indian farmers have not been shielded in the past.
Among India’s farm exports to the U.S., marine products account for the largest share—$248 million in 2024. These come from fishermen and seafood processors rather than crop farmers. After this, spices (especially from Kerala), rice, processed foods, bakery items, edible oils, sugar, and tea follow in much smaller quantities. Given India’s 146 million farmers, perhaps fewer than one million are directly tied to these exports. In fact, marine products dominate, and their production has already seen declining demand in recent years. Thus, while some sections of farmers—particularly spice growers in Kerala—may be hurt, the majority will remain unaffected.
The real concern is that while the government expresses worry about farmers, it must act decisively rather than merely offering reassurances. This could mean helping exporters find new markets, offering targeted subsidies for inputs like fertilizer, electricity, and water, or direct cash support to affected farmers. Without such measures, small segments of farmers and the laborers dependent on them may suffer.
On the other side, India imports agricultural products from the U.S., though in much smaller amounts. In 2024, India imported $238 million worth, mainly almonds, ethanol, soybean oil, and cotton. If India agrees to U.S. pressure to lower tariffs, these imports will become cheaper and increase in volume. That may harm Indian producers of similar goods, as cheaper American products flood the domestic market. Almond growers, for instance, could face direct competition.
Taking all these factors together, the impact of Trump’s tariff hike on Indian farmers is likely to be limited, affecting only a small minority. Much of what is exported is not raw farm produce but processed goods from factories, meaning that industrial workers and processors may also feel the pinch. Therefore, while the Prime Minister is right to reassure farmers, the broader reality is that the tariff dispute is more about trade negotiations than about mass agricultural distress in India.
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*Senior economist based in Ahmedabad
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