Last week, while addressing a program, Prime Minister Narendra Modi said that he would not let the interests of the country's farmers be harmed, even if he has to pay a personal price for it. The Prime Minister said this after US President Donald Trump's decision to impose 50 percent tariff on Indian exports to America. This indicates that the agriculture sector is the biggest reason for the bilateral trade agreement between India and America getting stuck.
Meanwhile, on the export front, positive news is coming on agricultural exports. India's agricultural exports have increased by 5.8 percent in the first quarter of the current financial year (2025-26). At the same time, the growth rate of the country's total exports in the first quarter has been only 1.7 percent and that too the exports of the previous year had increased almost negligible and in 2024-25, the country's total exports grew by only 0.1 percent to $ 437.4 billion as compared to the previous year, which was $ 437.1 billion in the previous year, but in contrast, the export of agriculture and allied sector increased by 5.8 percent from $ 12.20 billion last year to $ 12.92 during April to June 2025 this year. At the same time, the country's total exports stood at $ 112 billion in the first quarter this year, which is only 1.7 percent more than $ 110.1 billion last year.
In such a situation, even though the Commerce Minister Piyush Goyal is saying that our exports are on track, but after the Trump tariff, it is difficult to say whether it will be able to cross last year's level. At the same time, agricultural exports stood at $ 51.9 billion last year (2024-25), which was 6.4 percent more than the exports of $ 48.8 billion in 2023-24. These figures are definitely creating a trend that despite the high growth rate, agricultural exports registered an increase of 5.8 percent in the first quarter of the current financial year, while despite almost stagnency in total exports, only 1.7 percent growth has been registered in the first quarter of this year. Although the level of agricultural exports has not yet reached the highest level of $ 53.2 billion in 2022-23, but if the situation remains normal this year, it can cross the previous record level. Reason for this favourable situation is better availability of agricultural production for export due to better production prospects in the country. This situation has arisen due to two consecutive normal monsoons. But the imposition of 50 percent tariff by Trump may affect agricultural exports.
The growth rate of India's agricultural exports has not been very high in the last few years and this is due to policy decisions taken by the government such as export restrictions and imposition of minimum export price to control the prices of food products at the domestic level. Most agricultural exports from India have been in the form of commodities. The share of value-added products is very low in this. In such a situation, global prices and tariffs directly affect it. Due to these steps, agricultural exports have not yet crossed the level of $ 53.2 billion in 2022-23. During 2003-04 to 2013-14, India's agricultural exports increased from $ 7.5 billion to $ 43.3 billion. But after that it declined and it came back on track only after 2020-21.
India's major exports have been rice, wheat, sugar, marine products (mainly shrimp), spices, tobacco, coffee, buffalo meat, fruits and vegetables. Among these, sugar exports had once reached $ 5.5 billion, which was reduced to $ 700 million last year. In cotton, we have become a net importer from exporter.
The biggest loss due to Trump's tariff may be frozen shrimp exports, which were more than $ 1.9 billion to the US last year, but due to 50 percent tariff, it will no longer be competitive there compared to countries like Venezuela and Vietnam.
As far as the country's total merchandise exports are concerned, India's trade deficit in was $ 282.8 billion in 2024-25, while there is a trade surplus in the case of agricultural trade, last year India had a surplus of $ 13.4 billion in international agricultural trade. However, due to increased imports of agricultural and food products, India's agricultural trade surplus has decreased. In the year 2013-14, there was a surplus of $ 27.7 billion in agricultural trade. The import of edible oils, pulses, fruits and tree nuts, dry fruits is constantly increasing in the country. Last year, India imported agricultural products worth $38.5 billion. Almonds, pistachios and fruits imported from the US have a major share in this import. The import of dry fruits alone has crossed one billion dollars. Last year, 73 lakh tonnes of pulses worth $5.5 billion were imported.
However, despite this import, the current growth in exports is keeping the agricultural trade in a better position. But the 50 percent tariff imposed by the US will have an adverse effect on agricultural exports. However, the date of imposition of tariff is 27 August, so we will have to wait for the situation to become clear. On the other hand, the US has also imposed a 50 percent tariff on Brazil and who is India's export competitor in many agricultural products, which can affect other markets apart from the US because Brazil will sell its agricultural products in those markets and that may result in price fall. In these circumstances, the stance taken by both the countries in the coming days on the India-US bilateral trade agreement will decide whether India's agricultural exports create a new record or it will miss this target due to unfavorable conditions.