US Tariffs Cripple Rampur’s Mentha Oil Industry

The mentha oil industry in Uttar Pradesh’s Rampur region, a global hub for this aromatic compound, is reeling under the impact of a 50% U.S. tariff on Indian exports, effective August 27, 2025. The tariffs, doubling from an initial 25% due to India’s continued Russian oil purchases, threaten losses worth hundreds of crores and the livelihoods of over 10 lakh farmers and workers, according to local exporters.

Amrit Kapoor, a prominent Rampur-based exporter, described the crisis as catastrophic. “A product priced at USD 20 now costs USD 30 overnight due to the tariff. U.S. buyers are halting or canceling orders, leaving goods stuck in factories,” he told PTI. Mentha oil, used in products like toothpaste, chewing gum, and pharmaceuticals, supports a ₹1,000-crore annual trade in western Uttar Pradesh. Kapoor warned that farmers may not recover production costs, pushing many into financial distress. “If this continues, we may have to cut factory workers, as orders are drying up,” he added.

The tariffs, described as a “pressure tactic” by Shirish Gupta, President of the Rampur chapter of the Indian Industries Federation, have rendered Indian mentha oil uncompetitive against rivals like China, which face lower or no duties. Gupta urged the government to introduce relief schemes to prevent industry closures and protect jobs. “This is a temporary phase, and we trust the government will find a solution,” he said, expressing hope for a bilateral trade agreement.

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The Global Trade Research Initiative (GTRI) estimates that 66% of India’s $86.5 billion U.S. exports, including mentha oil, face the 50% tariff, projecting a drop to $49.6 billion in FY2026. Rampur, alongside Badaun and Barabanki, produces 80% of India’s mentha oil, employing millions. The Federation of Indian Export Organisations (FIEO) reported stalled orders worth ₹700 crore, with small farmers and MSMEs hit hardest.

As the industry braces for further losses, exporters are exploring alternative markets like Latin America and Southeast Asia, but the U.S., which accounts for 30% of mentha oil exports, remains critical. Prime Minister Narendra Modi, addressing the crisis in Gujarat, vowed to protect farmers and small businesses, with the Trade Ministry planning tax cuts and export incentives.

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