Indian delegation to visit US next week; exports to US in Jan falls 22%

The visit assumes significance as the US has rolled back the additional 25% tariffs imposed on India over its purchase of Russian oil, but is yet to lower the reciprocal tariffs from 25% to 18% that are still hurting exports. While goods exports in January remained flat, shipments to Washington slipped 22% to $6.5 billion. Meanwhile, goods imported from the US jumped 23% to 4.4 billion in January.

Amid concerns that India’s market access to US cotton under the Bangladesh-style market access for Indian garment exports could hurt Indian cotton farmers, an official said that adequate protection has been given to sensitive sectors.

“The variety of cotton that we are currently importing from the US is the same that will get preferential market access under the US deal,” an official said.

Concerns around cotton imports

Notably, India imports both extra-long staple (ELS) and upland cotton from the US. Experts said India imports $133 million worth of ELS cotton and $98 million worth of upland cotton from the US.

Farmer groups have expressed concerns that US exports of upland cotton will compete with Indian domestic production and displace some of it. To avail the zero duty benefit, Indian exporters would import from the US rather than buy this variety domestically, experts said.

According to the Bangladesh-US joint statement, the US committed to “establishing a mechanism” that will allow for certain textile and apparel goods from Bangladesh to receive a zero reciprocal tariff rate. This mechanism will allow imports of a “to-be-specified volume of apparel and textile” from Bangladesh to enter the US at this reduced tariff rate, the statement read.

The provisions allowing zero reciprocal duty market access also said that the volume of duty-free textile and apparel products from Bangladesh will be determined on the basis of Dhaka’s imports of “US-produced cotton and man-made fibre textile inputs” from Washington. Bangladesh is the second largest exporter of textiles and apparel goods after China.

Threats from US apple imports

On concerns regarding the threat to apples grown in India from imported US apples, government officials said India is a net importer of apples and any access given under FTAs is under quota. The official said India is a net exporter of farm products.

Former trade officer and head of think tank Ajay Srivastava said India produces about 2.5 million metric tonnes of apples annually, and nearly 50 lakh people in Jammu & Kashmir and about 5 lakh families in Himachal Pradesh depend on the apple economy for their livelihoods.

“Despite strong domestic output, India imported about 558,000 tonnes of apples in FY25, equivalent to roughly 22% of domestic production. Import dependence has grown steadily. In value terms, apple imports have increased more than forty-fold over two decades — from $9.9 million in 2004 to $417.6 million in 2024,” Srivastava said.

India imposes a 50% import duty on apples and permits imports only when the declared value exceeds Rs 50 per kilogram, Srivastava said, adding that even with high tariff protection, imports continue to grow.

“Tariff concessions linked to trade agreements could accelerate this trend. Reports indicate India, in its trade deal with the US, has agreed to reduce tariffs from 50% to 25% for a limited quantity of US apples while raising the minimum import price (MIP) to Rs 80/kg. The higher MIP is unlikely to restrain imports because US apples already enter at prices above that level,” Srivastava said.