US Trade Deal: Farmers Fear Impact on Indian Agriculture

The recent tariff reduction by the US on imports from India has raised alarm bells among Indian farmers. Following President Trump’s announcement to slash tariffs from 50% to 18%, US Agriculture Secretary Brooke Rollins stated that this trade deal aims to enhance access to American farm products in India's vast market. While this may benefit US farmers, it poses a significant threat to Indian agricultural livelihoods, especially as the US is one of the world's largest agricultural subsidizers.

Prime Minister Narendra Modi has consistently assured farmers of his commitment to safeguard their interests. He has made it clear that he will not compromise, even at a personal cost, to protect farmers, fisherfolk, and cattle keepers in India. His Independence Day speech emphasized this commitment, reinforcing his position against adverse policies that could harm the agricultural sector.

However, farmers’ organizations, like the Indian Coordination Committee of Farmers Movements (ICCFM), have voiced concerns over the trade deal. They have urged the Indian government to exclude agriculture from any trade agreements to prevent detrimental impacts on local farmers. In a letter to Commerce Minister Piyush Goyal, the ICCFM highlighted the risks posed by granting duty-free access to US agricultural products, especially given the US's ongoing trade wars which have affected its agricultural exports.

The ICCFM noted that the US agricultural trade deficit has nearly doubled, indicating a potential influx of surplus products in markets like India. For instance, US soybean exports significantly dropped from $34.4 billion in 2022 to $24.5 billion in 2024, and corn exports also saw a decline. The farmers' body warned that allowing heavily subsidized US agricultural products into India would undermine India's long-standing stance at the World Trade Organization (WTO) against such subsidies.

A report by the State Bank of India (SBI) has further cautioned that opening India's dairy sector to US imports could lead to massive financial losses for Indian dairy farmers, estimating an annual loss of Rs 1.03 lakh crore. The report also indicated that milk prices could drop by at least 15%, severely impacting the livelihoods of small dairy farmers due to the presence of a heavily subsidized US dairy industry.

As negotiations continue, the balance between international trade benefits and the protection of local farmers remains a critical issue for India. The government faces the challenge of maintaining its commitments to farmers while navigating complex trade relations with the US.