Kerala on brink of facing Rs 6000 crore setback; Massive layoffs possible in Agri sector

KOCHI: The agricultural sector in Kerala will be severely hit if US President Donald Trump implements the 50 per cent import duty on India. Kerala, which exports agricultural products worth more than Rs 6,000 crore to the US annually, will face the heat. An 80 per cent drop in export value is presaged.

The US buys everything from seafood, spices, tea, coffee, coir, cashew nuts, textiles, to medical equipment from India. Kerala's exporters cannot trade by paying high duties. American companies have not accepted the demand for additional liability sharing. Since a large portion of the products are perishable, exporters are staying away from the market for the time being.

Various big brands, including Walmart, have started cancelling contracts. Companies that used to buy coir doormats from Alappuzha have temporarily frozen their contracts. There are also strong concerns that more companies will follow suit in cancelling exports.

The situation will be set to worsen for the sales of rubber, spices, and seafood spices. The challenges are twofold for farmers, as the domestic market does not have the capacity to purchase such high volumes of produce.

1,500 Twenty-foot Equivalent Units (TEU) are shipped to the US from the Kochi port every month. Of this, 80 per cent are products from Kerala. Products from Kerala are also exported from the ports of Thoothukudi, Visakhapatnam and Mangalore.

Agricultural products worth 1.4 billion dollars arrive from Kerala in the US every year.

1. The price of agricultural and marine products may fall sharply

2. It will lead to job losses in traditional and agricultural sectors

3. Companies will be forced to reduce the wages of workers, and farmers will be forced to sell their products at lower prices