Prime Minister Narendra Modi’s statement that India will never compromise the interest of its farmers, livestock rearers and fisherfolk is the clearest expression of the red lines his government has drawn in the now-stalled trade agreement talks with the US. That there were issues in opening up India’s domestic market to US farm produce — GM maize and soyabean, fuel ethanol and dairy products — was known. Modi’s speech, at a conference, last week, commemorating the birth centenary of the noted agricultural scientist M S Swaminathan virtually formalised that position. Agriculture will be not just a sticking point, but something India would want to be kept out of the negotiations, even if they were to meaningfully resume. This hardening of stance has primarily to do with politics, both domestic and US President Donald Trump’s tariff attacks devoid of any economic rationale.
The imposition of a 50 per cent duty on Indian imports — inclusive of a 25 per cent levy as “penalty” for purchase of oil from Russia — has narrowed the Modi government’s space for give-and-take that is part of the process to clinch any trade deal, more so in a sensitive sector where even minor concessions can invite accusations of a sell-out. Trump has muddied the waters for India to enter into any constructive negotiations on agricultural trade. That’s unfortunate. Trade in farm produce between the two countries is booming. Based on the trends during January-June, both exports from India to the US and from the latter to the former are set to touch record highs in 2025. The sharp jump in India’s purchases of Californian almonds and pistachios and, likewise, frozen shrimp shipments from Andhra Pradesh and Odisha to the US illustrate the benefits of comparative advantage the two countries can reap in agriculture.
Reviving collapsed trade talks is challenging enough in the current situation. Promoting agricultural trade would be politically still harder. California’s tree nut growers, who exported over $1.1 billion of produce to India last year, can probably tell the US President how business can be done in a non-adversarial manner by reaching out to traders and consumers. India has much scope to expand exports of seafood, basmati rice, spices and essential oils to the US, just as it may need to import maize and soyabean for poultry and cattle at some point. All that is possible when common sense prevails.
