Trump’s 50% Tariff Hike Likely to Hit Kerala’s Spice, Seafood & Plantation Exports

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The US move to raise tariffs on Indian goods to 50% could deal a severe blow to Kerala’s economy, affecting spice, seafood, plantation, and IT exports, with fishing communities among the worst hit.

Thiruvananthapuram: The United States’ decision to ramp up tariffs on Indian goods to 50 per cent is set to deliver a blow to Kerala’s economy, a key contributor of spices, plantation produce, marine products, and IT services to the country’s export basket.

While the state government has acknowledged the looming challenge, a quantitative assessment of its impact is yet to be made, and strategic measures to offset the damage are still being formulated. The US remains a prime—if not the largest—import market for goods and services exported from Kerala.

Kerala has a long history as a hub of global trade, which has shaped its economy, culture, and heritage. Since ancient times, merchant vessels from West Asia and the Mediterranean sailed to the Kerala coast for spices, aided by the monsoon winds. Recent studies of maritime trade suggest that the much-hyped Silk Route was modest compared to the bustling sea trade between India, the Middle East, and the Mediterranean.

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Though Kerala has in recent decades lost its position as the world’s largest producer of many high-value spices such as pepper, the state’s earnings from a diverse range of spices and value-added marine products remain crucial to its economy. It is also a major producer of plantation crops like rubber, tea, and coffee—products that are export-intensive.

State Finance Minister K. N. Balagopal said a round-table of economists, policymakers, and foreign trade experts will soon be convened to deliberate on the disruption caused by the US tariff hike and devise a calibrated response within the state’s capacity.

Analysts say President Donald Trump’s tariff escalation has dealt a double blow to India, with export-oriented states like Kerala caught in the crossfire. High-tariff goods are likely to become less competitive in the US market, prompting buyers to turn to cheaper alternatives. At the same time, cultivating new overseas markets will take time.

The disruption of external trade could also intensify competition in the domestic market, potentially leading to unfair practices. The impact could ripple through the entire supply chain, hitting agricultural and fishery communities the hardest, as demand for their produce drops. MSMEs engaged in value addition of local goods are also expected to suffer.

The fisheries sector, in particular, faces a severe hit. Kerala has a coastline of 598 km and a blue economy zone of 2.18 lakh sq km. According to the State Planning Board’s Economic Review, Kerala ranks third in seafood exports by quantity and second by value in India. In 2023–24, it shipped around 1.97 lakh metric tonnes of marine products worth ₹7,231.84 crore. Frozen shrimp and cuttlefish—high-value seafood delicacies—are among the most sought-after exports.

However, the livelihood of fishing communities is already under threat from climate change and marine ecosystem degradation. A steep fall in fish prices due to reduced exports could further undermine their socio-economic security.

Adding a political dimension, the Left parties, especially the CPI(M), have called for an overhaul of India’s trade policy. They argue that there are limits to what an individual state can do in such situations and have urged the Centre to step in with sustainable measures to protect domestic producers.