The India-US trade deal has approached agriculture with caution, reducing import duties alongside quota systems. Expert Ashok Gulati states that this safeguards Indian farmers. Opposition parties have labeled it a surrender, while the government views it as a success.
Parliament has seen significant uproar over the India-US trade deal. Opposition parties have termed it a complete surrender, while government benches have projected it as the best deal under the circumstances. The truth likely lies somewhere in between, as trade deals always involve give-and-take.
India has agreed to purchase more energy, aircraft, and high-tech equipment from the US, committing to an intent to buy $500 billion worth of goods over the next five years, despite current annual imports being under $50 billion. In return, the US has reduced import tariffs on Indian goods to 18 percent, aligning with competitors in South and Southeast Asia and nearly half of what is imposed on China.
Concerns in the agricultural sector include fears that US agri-produce will flood the Indian market, genetically modified (GM) crops or derivatives like soya oil and dried distillers’ grains (DDGs) will risk public health, and subsidized large US farms will harm Indian smallholders. In 2024, India's total exports to the US were about $81 billion and imports $43 billion, yielding a $38 billion surplus. For agriculture, exports were $5.7 billion and imports $2.1 billion, with a $3.6 billion surplus.
The deal has largely opened crops not grown in India or on very small areas, such as tree nuts and berries. Almonds already enter at around 10 percent duty. Apple duties may drop from 50 percent to 25 percent, but accompanied by import quotas. India prohibits direct imports of living GM corn or soya, but processed products like soya oil and DDGs have been imported for some time; traces of GM are negligible or absent, and they pose no health risks to poultry, cattle, or humans according to the US Food and Drug Administration. GM crops are cultivated in 76 countries across over 200 million hectares.
The US is a net importer of agricultural products ($59 billion in 2024). India provides substantial input subsidies, including fertilizer, credit, insurance premiums, and direct income support via PM-KISAN. US GM corn and soybean productivity is three times higher than in India. According to Gulati, the deal is a smart move in the agri-segment, avoiding major concerns through caution and quotas. More details may emerge by the end of March.
