Tariff impact: Indian spices exporters fear loss of market in US to Asean competitors in some categories

India’s spices exports registered a near 6 per cent growth during 2024-25 to touch a record $4.722 billion, up from previous year’s $4.46 billion
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Trump administration’s 25 per cent tariff will make Indian spices like pepper, turmeric and ginger less attractive in the US market compared to other origins like Vietnam and Indonesia, exporters said. They fear the loss of market share in these categories to the competitors from the ASEAN region.

The US is the second largest market for Indian spices. Exports of spices and spice products to the US in value terms stood at $711 million during 2024-25, up 15 per cent over the previous year’s $619.29 million, according to Spices Board data. In volume terms, the exports were up 13 per cent at 1.256 lakh tonnes over the previous year’s 1.114 lakh tonnes.

Emmanuel Nambusseril, Chairman of All India Spices Exporters Forum, said the spice industry is waiting to see what will be the final tariff, and the penalty for petroleum imports from Russia. As of now, the major competition is from Vietnam and Indonesia for pepper (black/white), and the former carry a tariff of 20 per cent and the latter 19 per cent. They would be at advantage if the tariff for India is 25 per cent (plus penalties), he said.

For other spices, the US customers have to depend on India, which is the largest producer (and consumer also) by bearing the additional tariff, and penalty. “There could be reduction in the exports for the immediate future, but we expect them to normalise in, say 3-4 months,” Nambuserril said.

Currently, Indian spice products faced a tariff of 10 per cent and almost all of the exporters are passing this on to the customer. “So far, we have not been faced with any questions from the US customers,” Nambusseril said.

As the tariff goes up, the US importers might tend to slow down, but the Indian exporters could not absorb the tariff or any additional penalties, rather than incorporate that in the product costing, Nambusseril added.

Prakash Namboodiri, Director, AB Mauri India (Spices) said Indian spices will become more expensive for the US importers and retailers, making it less attractive compared to alternatives. “Countries like Vietnam, Indonesia, which face lower tariffs, could grab India’s market share especially for competitive products like pepper, turmeric, ginger etc,” he said.

The result could be that the spice brands in the US grocery stores may either raise prices or reduce product variety, affecting consumer demand. This would result in lower consumption and lower exports.

Exporters may face delays, renegotiations, and increased logistics costs, longer working capital requirements, loss of orders, and uncertain future, he added.

The importance of the US in spice exports cannot be discounted as it is the second largest importer of spices from India and the single largest value-added spice buyer. India’s spices exports registered a near 6 per cent growth during 2024-25 to touch a record $4.722 billion, up from previous year’s $4.46 billion.

Further, Namboodiri said the buyers are unwilling to partake in a 25 per cent additional amount to import and they are looking at a big share of the duty hike to be covered by the exporters. The export of spices from India happens with small margins of 2 to 5 per cent. Thus, exporters would find it extremely difficult to support the sale. The sellers in India would have already bought the entire contract raw material and any cancellation of contract would result in major losses, he added.

Published on August 1, 2025