India Urged to Retain Farm Tariffs as Subsidised US Imports Threaten Livelihoods
The Global Trade Research Initiative (GTRI) has warned that the proposed India-US free trade agreement could reduce import tariffs on US agricultural products. The group cautioned that such acts may pose threats to food security in India and threaten the source of livelihoods of more than 700 million of its rural population. The proposal has raised anxiety about the possibility of US exports entering Indian markets, as they are highly subsidised.
Substantial subsidies benefit US agricultural exports, such as rice, dairy, genetically modified soy, poultry, and corn. According to GTRI, such products have the potential to flood the Indian markets when global prices are down, thus hurting the local producers and distorting the prices.
Threat of Subsidised US Imports on Indian Farmers
GTRI emphasized that heavy reductions in agricultural tariffs would subject the small-scale farmers in India to global, unstable market conditions. The risks were evident in historical data of 2014, 2015, and 2016, which recorded a sharp decline in world grain prices and a fall below the level of $160 per tonne of wheat. Such crashes had previously devastated farmers across Africa and could similarly impact Indian agriculture if import barriers are weakened.
India currently applies tariffs ranging between 0 and 150% on agricultural imports to protect its domestic sector. Ajay Srivastava, GTRI’s founder, stated that removing these protections could undercut Indian producers and allow subsidised US goods to dominate local markets. He pointed out that the US itself uses complex tariffs and non-ad valorem duties to protect its farm industry.
India’s Rural economy still relies heavily on agriculture, whereas the agricultural corporation structure exists in the US. The GTRI reaffirmed that India has to maintain its agriculture policy independence to manage food stocks and ensure against geopolitical turmoil and rural incomes.
Concerns Over GM Foods and Dairy Imports
The other key point of contention is that India is very strict about genetically modified (GM) food. The US has also spoken out against the regulatory framework adopted in India, citing that it is unscientific and ambiguous. According to Indian authorities, however, people’s resistance and the danger to the environment necessitate a cautious approach. India also intends to safeguard its exports to GM-sensitive markets such as the EU by resisting the adoption of GM crops.
India’s dairy import rules further complicate trade negotiations. Current protocols prohibit the import of dairy products from animals fed with meat, blood, or internal organs of other animals. This measure effectively blocks US dairy imports, which often do not comply with such standards. Srivastava stated that India’s dairy sector is supported mainly by smallholders owning one or two animals, and opening the market to subsidised imports could destroy rural livelihoods.
Infrastructure Gaps and Supply Chain Risks
Relaxing import rules in other sectors like poultry could also strain India’s cold storage infrastructure. Inadequate sanitary and phytosanitary (SPS) implementation further limits the country’s ability to manage sensitive imports.
The GTRI also warned that India’s decentralised supply chain could result in the unintentional spread of GM traits into local crops. Such contamination could harm exports to GM-free markets and undermine consumer trust.
India is still supporting the GM-free certification procedures in 24 products, even after the US objections. GTRI maintains that these measures are fundamental to product traceability.
