India-US Trade Agreement: A Delicate Balance in Agriculture
Union Agriculture Minister Shivraj Singh Chouhan has emphasized that the India-US trade agreement will not compel India to open its market to "major crops," including foodgrain, fruits, or dairy products. This statement comes in response to claims by US Agriculture Secretary Brooke Rollins, who asserted that the deal announced by President Donald Trump would lead to increased exports of American farm products into India's vast market. The specifics of the agreement remain undisclosed until its official signing or the release of a joint statement.
Agricultural Challenges in Trade Negotiations
Agriculture has consistently been a significant obstacle in trade negotiations, and for good reason. Unlike the European Union, which posed fewer issues due to its lack of cost competitiveness in most commodities, the United States presents a more complex scenario. The US is a major producer of large-acreage crops such as soyabean, corn, and cotton, all of which India also cultivates extensively. For instance, India grows soyabean on 13 million hectares, with corn and cotton each on 12 million hectares.
Comparative yields highlight the potential risks: American per-hectare yields for corn and soyabean exceed 11 tonnes and 3.4 tonnes, respectively, compared to India's 3.5 tonnes and 1 tonne. Large-scale imports of these commodities could have effects similar to those of palm oil from Indonesia and Malaysia, potentially harming domestic producers. Additionally, the US is the world's largest producer and exporter of ethanol derived from corn. If India were to allow ethanol imports for blending in fuels, it could face opposition from domestic distilleries that produce ethanol from sugarcane and cereal grains.
Identifying Opportunities for Liberalisation
Despite the challenges in opening up bulk commodity imports, there is substantial scope for identifying low-hanging fruit where liberalisation could be beneficial. India is the largest market for US tree nuts, with imports valued at an estimated $1.5 billion in 2025. Currently, India imposes a 100% import duty on walnuts and Rs 100 per kilogram on shelled almonds, despite minimal domestic cultivation of these dry fruits. Similar opportunities exist for blueberries and cranberries, where domestic production is limited.
A flexible approach is crucial: India must balance protecting its export interests—such as shrimps, spices, and basmati rice—with shielding domestic producers from imports. At the end of the day, India exports more agricultural produce to the US than it imports, making it essential to defend these export markets proactively. This calls for moving beyond maximalist and overly defensive positions to embrace a more strategic give-and-take in trade negotiations.
Conclusion: Strategic Caution in Agri-Trade
In summary, while agriculture remains a key stumbling block in India-US trade talks, a careful and nuanced strategy is necessary. By focusing on areas with minimal domestic impact, such as tree nuts and certain fruits, India can liberalise trade without compromising its agricultural sector. Simultaneously, safeguarding export interests and managing imports of bulk commodities like soyabean and corn will require ongoing vigilance and flexibility. The path forward involves cautious movement and proactive engagement to ensure mutual benefits in the trade relationship.
