How Tariffs Are Forcing Indian Food Exporters to Rethink Global Trade Strategies

Every new tariff feels like a fresh wound across India’s export community. For food exporters, spices, grains, seafood, and processed foods, the impact is more than numbers on spreadsheets. It translates into canceled orders, mounting inventories, tighter margins, and even existential anxiety about staying competitive.

Below is an attempt to capture both the hard data and the human side of what’s happening, followed by strategies that exporters (and traders) can adopt to weather the storm.

The Toll in Numbers: Tariffs, Cancellations & Lost Ground

These aren’t just projections or fears; many of these impacts are already playing out.

Steep Drop in Export Volumes & Trade Shock

• Between May and August 2025, India’s exports to the US declined by 22.2 %, slipping from about USD 8.8 billion to USD 6.9 billion.SOURCE

• Even tariff-exempt goods saw steep falls: export volumes for those dropped 41.9 % in that same period.

• The US government’s new tariffs are expected to impact USD 48.2 billion of Indian exports.

• Sectors like garments, gems & jewelry, seafood, home textiles are reported to be among the hardest hit. SOURCE

  
  

These numbers suggest not just short-term disruption, but a knock to India’s standing in global supply chains.

Cancellations, Inventory Pile-Ups & Regional Hits

• In Kerala (a key export region for spices, tea, marine products, and rubber), state officials estimate a loss of ₹2,500–4,500 crore annually due to U.S. tariffs.SOURCE

• Exporters of spices to the U.S. are warning that the new tariff regime may make Indian spices less price-competitive relative to ASEAN countries like Vietnam or Indonesia.

• The Indian Spices Board and leading exporters are calling for diplomatic efforts to negotiate tariff relief or carve-outs.SOURCE

Margin Pressure & Loss of Competitive Edge

• Before August 2025, many Indian goods entered the U.S. under relatively low import duties (often between 0.5 % and 3 %). 

• From August 27, 2025, the U.S. raised this by an additional 25 percentage points, bringing many effective tariffs to 50 %.

• That jump may wipe out margins for many exporters, especially those who cannot increase prices without losing orders. Many will be forced to absorb some of the burden, especially for long-term buyers.

SOURCE

In short, exporters are being squeezed from both ends: higher costs and shrinking demand.

The Human Side: What Exporting Feels Like Now

Numbers don’t tell everything. Behind each percentage point are real firms, people, and decisions. 

Here’s what many exporters are grappling with:

• Order cancellations or postponements, buyers telling suppliers to hold off or divert to alternate sources

• Contract renegotiations  pressure to absorb tariffs, give discounts, or accept delayed payments

• Stockholding risk, raw materials and processed goods piling up unsold, increasing storage cost & spoilage risk

• Cash-flow stress: higher working capital needed, delayed payments, and tighter credit lines

• Loss of trust/instability, long-standing buyer relationships shaken by sudden price shifts

Many exporters feel they’re caught in a storm not of their making. Yet, some are fighting back, adapting, innovating, and leaning on their strengths.

How Exporters Can Survive & Even Stand Out

Strategy	What It Addresses	Tips & Examples
Diversify Markets	Reduces dependency on the U.S. market	Explore the growing demand in the Middle East, Africa, Latin America, and Southeast Asia. Use trade missions and local partners.
Value Addition & Processing	Shields against price competition at the raw commodity level	Turn raw spices into extracts, blended formulations, and branded packaging. A higher margin helps absorb tariffs.
Transparent Cost Sharing with Buyers	Eases pressure on your margin	Negotiate shared cost models or phased adjustments. Communicate openly about rising duties.
Lean Operations & Cost Efficiency	Helps maintain viability under squeezing margins	Optimize supply chain, consolidate shipments, reduce waste, renegotiate freight contracts
Quality & Certifications as Differentiators	Helps maintain credibility & loyalty	Emphasize certifications (organic, ISO, GMP), traceability, and consistent quality control

Each exporter’s situation will differ. The goal is to assemble a toolkit adaptable to your product, cost structure, and buyer relationships.

A Word from Suman Exports

As your reliable Spices Exporter from India, we fully understand the pressures of this turbulent trade environment. Even as tariffs surged and competition intensified, we haven’t compromised on quality.

• We continue to deliver spices processed with strict quality standards, with thorough traceability from farm to export.

• We maintain open dialogue with our partners in importing countries, absorbing portions of cost where necessary to protect trust.

• We’re actively exploring new markets and customizing spice solutions to stay relevant and resilient.

  
  

When many in the industry were forced to dilute, we held our line. For us, long-term relations, consistency, and integrity matter more than short-term gains.

Final Thoughts

Tariffs, cancellations, and competitive shifts are testing every food exporter in India. Yet those who survive the ones who remain agile, cost-conscious, quality-obsessed, and market-diverse will emerge stronger.

If you are a trader, importer, or food brand looking for a dependable spice partner in these times, Suman Exports stands ready with uncompromised quality, experience, and a partner mindset. Contact us to request a sample order or to get a quote.