The ‘landmark’ deal threatens apple farmers with duty-free US imports and saddles carpets with a 6x higher tariff. The Kashmir Chamber of Commerce & Industry (KCCI) has failed to protect the region’s core interests.
Nasir Hamid Khan
On 3 February, even as details of the trade deal were being sought in the Indian Parliament, the Kashmir Chamber of Commerce and Industry (KCCI) issued a press statement hailing the leadership of the Union Industry and Commerce Minister, Piyush Goyal, and declaring the deal a “landmark step” that would be a “major boost not only for the handmade carpet sector but for the entire handicraft industry of Kashmir.”
On 7 February, Piyush Goyal made the deal’s details public on his X (formerly Twitter) account. A cursory examination suggests that Kashmir’s economy may be among the worst affected, if not the hardest hit. Reading the deal alongside President Trump’s declaration of 2 February, the following facts emerge regarding Kashmir:
– India has agreed to reduce tariffs on imports of industrial goods, food, and agricultural products from the United States to zero per cent. This includes tree nuts, fresh and processed fruits, and other unspecified products.
– The United States will impose a “reciprocal” tariff rate of 18 per cent on imports from India, including textiles, apparel, and artisanal products.
– India also agrees to “address long-standing non-tariff barriers” to the trade of US food and agricultural products.
– The United States affirms it will “take into consideration” India’s request to lower tariffs on Indian goods during negotiations for a Bilateral Trade Agreement (BTA).
To understand the impact of zero-duty imports, we must look at the history of the apple trade. Until 2019, the US paid a 50 per cent duty on apples exported to India. As a retaliatory measure after Washington increased tariffs on Indian steel and aluminium, India imposed an additional 20 per cent duty on US apples and walnuts in 2019, plus ₹20 per kg on almonds, on top of the existing 50 per cent duty.
India agreed to remove the additional 20 per cent duty during Prime Minister Modi’s visit to the US in June 2023, as part of the resolution of six WTO disputes between the two countries. In response to protests by farmers in Himachal Pradesh and Kashmir, Piyush Goyal had clarified that there was “no duty reduction on apples” and that only the retaliatory 20 per cent duty had been removed. He added that the government had imposed a Minimum Import Price (MIP) of ₹50 per kg on apple imports from all countries except Bhutan, to prevent flooding of the Indian market and protect domestic farmers. The government insisted that the 50 per cent Most Favoured Nation (MFN) duty remained and, together with the MIP, was sufficient to safeguard local growers. It remains unclear whether the MIP will stay in effect under the new trade deal or whether it will be enough to protect farmers.
Given that apple imports from other countries will still attract a 50 per cent duty, the United States would effectively dominate—if not monopolise—the Indian apple market.
Domestic growers point out that India produces only 7–8 tonnes of apples per hectare, compared to 40–70 tonnes per hectare in the US, Iran, New Zealand, and China, owing to better geography, advanced technology, and mechanisation. Sensing economic devastation from President Trump’s announcement, Himachal Pradesh apple growers called for mass agitation on 4 February, even before the deal’s details were fully revealed.
The need to protect domestic farmers is evident from the impact of the 20 per cent retaliatory duty imposed from 2019 to 2023. It significantly shifted market share away from the US to other countries. US apple imports fell sharply from 127,908 tonnes in 2018–19 to just 4,486 tonnes in 2022–23. While annual apple imports to India have remained stable at 239–305 million USD (around 5–6 lakh tonnes), the share once held by the US was taken over by Turkey, Italy, Chile, Iran, and New Zealand. Imports from non-US countries rose from 160 million USD in 2018–19 to 290 million USD in 2022–23.
India is the seventh-largest producer of apples, with an annual yield of 25–28 lakh tonnes, about 80 per cent of which comes from Kashmir. The apple industry is Kashmir’s largest employment generator, providing 400 man-days of work per hectare annually, employing 3.5 million people, and contributing 8 per cent to the region’s Gross State Domestic Product (GSDP) in 2023–24.
The waiver of duty on US apples threatens to eliminate competition from other countries and poses an existential risk to domestic farmers. This move could hand over an annual market of 30–35 lakh tonnes to the United States. President Trump has effectively ensured that American farmers’ incomes will multiply, while Kashmiri farmers—200 years behind in technology and scale—are left unprotected against predatory pricing and market flooding.
Turning to carpets: the export tariff on Indian carpets until recently stood at 2.90 per cent, but retaliatory and penal duties raised it to 52.90 per cent. Unlike India, which removed not only the retaliatory 20 per cent duty on apples but also the original 50 per cent duty, the United States has retained a substantial tariff of 18 per cent on carpets—more than six times the original rate—and termed it “reciprocal.” Only President Trump or the President of the Kashmir Chamber of Commerce and Industry could explain how a six-fold tariff hike is reciprocal or a “landmark step” that enhances global competitiveness. By this logic, higher tariffs make us more competitive. In welcoming the 18 per cent rate, the Chamber has closed the door to negotiating for tariff reductions for Kashmiri products, failing its duty to protect the region’s already distressed economy.
This brings to mind Malcolm X’s interview in March 1964, a year before his assassination, in which he said:
“No, no, I will never say that progress is being made. If you stick a knife in my back nine inches and pull it out six inches, there’s no progress. If you pull it out all the way, that’s not progress. Progress is healing the wound that the blow made. And they haven’t even pulled the knife out much less healed the wound. They won’t even admit the knife is there…”
The least the Kashmir Chamber of Commerce and Industry could have done was acknowledge the “knife” of the 18 per cent tariff and work for its removal. It could have opposed the duty waiver on US apples, walnuts, and almonds, and highlighted the devastating consequences for Kashmiri farmers and associated industries. The image of apples dumped on roads and in water bodies after the 2025 floods—a sight no Kashmiri can forget—makes this threat even more poignant. The deal’s impact on other agricultural sectors remains ambiguous.
It is time the Kashmir Chamber of Commerce and Industry realises that it is meant to be a watchdog for Kashmiri economic interests, not a lapdog. Its premature praise and prolonged silence on critical issues have repeatedly harmed the region.
I find it fitting to end an article on the US-India trade deal with a well-known American-English closing: “Thank you for your attention to this matter!”
The writer is a former Senior Vice President of the Kashmir Chamber of Commerce and Industry (KCCI). The views express are his own.
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