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Bad news for Turkey and Iran – India lifts import duty on the US apples

EastFruit analysts draw attention to an extremely important apple industry development, which that took place after the meeting between US President Joe Biden and Indian Prime Minister Narendra Modi on June 22, 2023. During the meeting, the leaders of the two countries agreed to eliminate the additional 20% import duty that India imposed on imports of fresh apples from the United States in back in 2018.

“This decision will have huge implications for the global apple trade because it is an agreement between one of the world’s largest apple importers and one of the world’s top exporters. Before India imposed additional duties on US apples, the US was the main supplier of these fruits to the Indian market, exporting up to 150 thousand tons of products in some years. However, after the additional duties were imposed, imports of fresh apples from the United States fell significantly and amounted to only about 21 thousand tons in 2022,” explains Andriy Yarmak, an economist at the Investment Centre of the Food and Agriculture Organization of the United Nations (FAO).

It should be noted that India during this time has sharply increased imports of fresh apples. According to preliminary estimates, in 2022, apple imports to India exceeded 400 thousand tons, which makes it the second largest world importer of these fruits. The countries-suppliers of apples have also changed dramatically. India now imports the main volumes of apples from two countries: Iran and Turkey. Also, such countries as Italy, Chile, New Zealand, and Poland increased exports of apples to India significantly since 2018.

“Obviously, the return of US suppliers to the Indian apple market will have a very serious impact on supplies from Iran, Turkey, and probably Italy. The United States has traditionally exported to India predominantly red varieties of premium quality apples. After duties are lowered, US apples will become more affordable, which will impact the high and middle price segment directly, and the lower price segment indirectly. Low price segment of the Indian market is now dominated by fresh apples from Iran,” says Andriy Yarmak.

Of course, this is good news for US apple growers and exporters. However, one should not expect that the volume of apple exports to India from the US will quickly return to previously achieved levels as it takes time to regain market presence. Also, since shipments to India have dwindled, US production of the traditional variety of apples shipped to India, which is Red Delicious, has dropped sharply. However, well-colored Gala clones from the US are also likely to enjoy a high level of popularity in the Indian market.

“If Iran and Turkey reduce apple exports to India in the new season, they will try to sell more of these fruits to the countries of the Middle East, Eastern Europe, the Caucasus, and Central Asia. Therefore, this event can be considered negative for farmers from Ukraine, Poland, Georgia and Moldova, because additional price pressure will be felt in the region,” Andriy Yarmak believes.

If you wish to can see exclusive photos on how apples are sold in India, please click here. To get acquainted with unexpected facts about the Indian apple market, please refer to our article “Unexpected facts and typical misconceptions about the Indian apple market from EastFruit”.

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