India agreed to remove retaliatory tariffs on apples, chickpeas and other U.S. exports on Thursday, eliciting a warm response from farmers and producers in Washington state.
The cuts were announced as part of an agreement between President Joe Biden and Indian Prime Minister Narendra Modi, who was in Washington, D.C., on a state visit. The agreement resolved six outstanding World Trade Organization disputes between the two countries, including the duties on U.S. foodstuffs.
The agreement came after months of advocacy by U.S. lawmakers, including Sen. Maria Cantwell, D-Wash., who met with Modi in India in February. Thursday's relaxation, Cantwell said in an interview, "gives people a lot of hope for the future."
U.S. Trade Rep. Katherine Tai said that American farmers and manufacturers will now enjoy "renewed access to a critical global market," in addition to a strengthened trade relationship "with one of our closest partners."
Modi also announced plans for an Indian Consulate in Seattle, to open this year.
The agreement is especially welcome news for Washington growers, who relied on India as a major export market before 2018, when the country imposed several wide-ranging tariffs. The tariffs are expected to be lifted within 90 days.
Todd Fryhover, president of the Washington Apple Commission, called the deal a "big win for trade policy and Washington apple growers."
"The Washington apple industry has worked hard to develop the Indian market for our world-class apples, and this will help us try to regain our lost market position," Fryhover said in a statement. "We feel confident that Indian consumers will benefit by having high quality Washington apples once again available at accessible prices."
Once the second-largest foreign market for Washington apple producers, exports to India reached $120 million in 2017.
"Now our growers will once again have access to this $120 million market," Cantwell said.
India has the highest applied tariff rate of all major world economies, according to a January report by the U.S. trade representative's office.
The same report noted that, when it comes to agricultural products, India has some of the highest bound tariff rates in the world — allowing the country to alter its rates with little warning and creating "tremendous uncertainty" for exporters.
That was the case in June 2019, when India levied various tariffs on U.S. imports, in retaliation for duties on steel and aluminum imports imposed by the Trump administration. Existing rates on apples were raised 20% — bringing India's effective "apple tariff" to 70%.
Since then, the once-lucrative Indian export market has fallen over 99%. This season, Washington producers have exported less than $1 million to the country, with their Indian market share dropping from 53% to less than 1%.
"When the Trump tariffs came in place, and then the retaliation, it denied our growers a market — and a big market," said Cantwell on Thursday. "The frustration they have felt has literally been borne out in less places to sell apples, people basically pulling out from farming in general, and fewer and fewer agricultural families."
"This [agreement] turns that around," she added.
Now, Washington apples will compete with apples grown in northern India, as well as those imported from Iran, Chile and Turkey. Those apples, according to Cantwell, lack the "high labor or environmental standards" of U.S. orchards.
Thursday's agreement also lifts Indian duties on chickpeas and lentils, which were imposed as part of the same retaliatory measures. Washington is the largest U.S. producer of chickpeas and its third-leading producer of lentils.
"It's a very comprehensive reset to U.S.-India relations in general," said Mark Powers of the Northwest Horticultural Council. "Our piece is a small part of that, but it's very important for Washington. It's very clearly a win."
Powers said the deal was years in the making, and required an "incredible investment of energy from two administrations."
"Now the hard work begins in the sense of rebuilding that market," Powers said. "It's going to take time, but things change. Our growers compete around the world, and now they have the chance to rebuild in India."
Powers credited Washington's congressional delegation with "keeping the issue alive, prioritized, and at the top of the list."
Cantwell was one of several politicians to formally raise the issue with the U.S. Department of Commerce and the trade representative. In February, as part of a Senate delegation to India, she met with directly with Modi.
During Thursday's interview, Cantwell said she was "thrilled" about the agreement. She noted that, in Modi's joint address to Congress, the prime minister chose to include Washington among several U.S. states that India sought closer ties with.
"Of course, he mentioned our [state] first," she said. "And it wasn't because it's alphabetical."
The agreement also provides for several technology partnerships between India and companies in the Pacific Northwest, including investments by Boeing and Idaho-based semiconductor firm Micron Technology.
"This level of connectivity [between Washington and India] — and again, the prime minister talked about it in this speech — is unprecedented," Cantwell said.
