India’s Farm Exports Grow Despite Trump Tariffs

Context

Despite the steep tariffs imposed by the U.S. administration under Donald Trump, which were as high as 50%, India’s agricultural exports were seen as being very resilient and are expected to reach more than $53 billion in the financial year 2025-26. This growth of 2.3% YoY shows a strategic shift in trade as India has managed to move from traditional markets to diversifying its export markets.

Performance and Resilience in Exporting

• The value of farm exports was about $53.1 billion in 2025-26 compared to $50.1 billion in 2024-25, and close to the record high of $53.2 billion in 2022-23.
• Export of agricultural products have improved relative to overall Indian merchandise exports which increased by 0.9% in the same period.
• Top Growth Drivers: Buffalo meat, marine products and coffee were among the top growth drivers. In 2025-26, for the first time in the history of the country, the value of coffee exports has exceeded $2 billion.

Factors Behind Continued Growth

• Market Diversification: Exporters compensate for reduced business in the U.S. market by diversifying their business to other countries such as China, Vietnam, Japan and Egypt.
• Growing income from high global prices and supply shortages, particularly of commodities such as coffee.
• Policy Support: Agricultural and Processed Food Products Export Development Authority (APEDA) and Marine Products Export Development Authority (MPEDA) actively encouraged quality and market access.
• Easing Restrictions: Non-basmati export restrictions were eased, which contributed in increasing the export quantity.

Impact of Trump Tariffs (2025-2026)

• Total exports increased, but with the U.S. tariffs (25% and then raised to 50% on some products) it affected some of the most important high-value agricultural products.
• The impact of the tariffs was to temporarily reduce exports to the US, which was offset by the trade diversification mentioned above.

Challenges and Changing Trade Balance

• Narrowing Surplus: In 2013-14, farm exports were valued at $12.7 billion and agricultural imports at $15.2 billion, giving rise to a trade surplus, but in 2025-26, agricultural imports have increased at a faster rate, ending the trade surplus at $27.7 billion.
• Cotton Sector Turnaround: India has become a net importer of raw cotton from being a net exporter because of the shortfall in production.

Way Forward for India

• Emphasis on Productivity: To ensure the export momentum, emphasis should be given to technologies that will improve yields, particularly in cotton.
• Value Addition: Processing raw commodities into value added products will improve the profit from export.
• Strong Trade Agreements: Continue to negotiate improved terms in current free trade agreements with U.S. and EU to reduce the effects of tariffs.

Conclusion

Even if the overall merchandise exports fall short of expectations, India’s agricultural sector has been able to adjust quickly and diversify its markets to overcome external shocks.

Source: IE

UPSC Main Practice Question 

Q. Despite rising protectionist measures such as the Trump-era tariffs, India’s agricultural exports have shown resilience and growth.

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