AFPWhy doesn’t India even buy a bushel of American corn?
This is a recent question raised by U.S. Secretary of Commerce Howard Lutnick criticize India’s trade policy scans its market restrictions.
In another interview, Lutnik India has been accused of blocking American farmers And urge it to open its agricultural markets – suggest quotas or restrictions as possible methods.
Agriculture is the key battlefield for US President Donald Trump Continuously escalating trade warswith Tit-for-Tat or reciprocity tariffs will begin on April 2.
Tariffs are taxes charged on goods imported from other countries. Trump has repeatedly won India’s “tariff king” and the “big abuser” of trade relations.
Washington has been pushing for a greater opportunity to enter India’s agricultural sector for years, viewing it as a major untapped market. But India has strictly protected it on the grounds of food security, the interests, livelihoods and interests of millions of small farmers.
To be sure, India’s transition from a food-deficient country to a powerhouse with a food surplus is one of its biggest success stories.
In the 1950s and 1960s, the country relied on food aid to feed its population, but a series of agricultural breakthroughs changed that. India has become self-sufficient in staple foods and has become the world’s largest milk producer. Rapid growth in horticulture, poultry and aquaculture has expanded the food basket.
Today, India not only wants to feed its 1.4 billion people, but also as the world’s eighth largest agricultural product exporter, it also ships grains, fruits and dairy products around the world.
However, despite significant gains, Indian agriculture still lags behind productivity, infrastructure and market access. Global price volatility and climate change add to challenges. Crop yields are far behind the best in the world. Small landholding issues exacerbate the problem – Indian farmers work on average less than hectares, while their U.S. counterparts have more than 46 hectares of time in 2020.
Not surprisingly, productivity remains low – agriculture employs nearly half of India’s labor force, but only 15% of GDP. By comparison, less than 2% of the U.S. population depends on agriculture. Due to limited manufacturing, more and more people are trapped in low-paying farm jobs, an unusual trend in developing countries.
This structural imbalance also shapes India’s trade policy. Despite farm surpluses, India maintains high tariffs to protect its farmers from cheap imports. It maintains moderate to high tariffs on farm imports – from zero to 150%.
India’s weighted average tariffs – India’s average tax rate for agricultural products in the United States is 37.7%, compared with 5.3% for Indian goods, according to the Delhi-based think tank Global Trade Research Program (GTRI).
Getty ImagesBilateral farm trade between India and the United States is modest, at just $8 billion (£6.2 billion).
India mainly exports rice, shrimp, honey, vegetable extract, castor oil and black pepper, while the United States pie almonds, walnuts, pistachios, apples and lentils.
However, with the two countries engaged in Trade AgreementExperts say Washington now wants to push for “large ticket” farm exports — wheat, cotton, corn and corn — to narrow the $45 billion trade deficit with India.
“They don’t want to export berries and stuff this time. The game is much bigger,” said Biswajit Dhar, a trade expert based in the Delhi Social Development Think Tank Committee.
Experts believe that prompting India to lower farm tariffs, lower prices to support and open up genetically modified crops (GM) crops, while dairy products ignore the basic asymmetry in global agriculture.
For example, the United States has subsidized agriculture heavily and protected farmers through crop insurance.
“In some cases, the U.S. subsidies exceed 100% of production costs, creating an uneven playing field that could destroy small farmers in India,” said GTRI’s Ajay Srivastava.
Agriculture is the backbone of India, supporting more than 700 million people, nearly half of the country’s population.
“The key to remember is that agriculture in the two countries is completely different,” said Abhijit Das, former head of the World Arts Research Center at the Indian Academy of Foreign Trade.
“The United States has commercial agriculture, and India relies on intensive survival agriculture. It’s a livelihood issue for millions of Indians to benefit American agribusiness.”
But India’s agricultural challenges are not only external. Mr Dahl said most of the struggles in the industry were “doing it yourself.” Agriculture has long been underfunded, less than 6% of India’s total investment – funds for infrastructure, machinery and other long-term assets that are critical to growth.
AFPTo protect millions of livelihoods, the government has masked major crops such as wheat, rice and dairy products and provided import tariffs and price support. “But that didn’t inspire confidence,” he said.
Four years ago, Thousands of farmers protest Need better prices and minimum government support for staples, mainly wheat and rice.
“Even relatively good farmers, farmers who sell surpluses won’t see turnover soon. If they feel this way, imagine the dilemma of surviving farmers,” Mr Dhar said.
In addition to domestic dissatisfaction, trade negotiations add another layer of complexity.
Mr Darth said the real challenge for India would be to “conclude an agreement with the United States that takes into account the U.S. export interests in agriculture while balancing India’s interests in the agricultural sector”.
So what is the way forward?
“India must not put pressure on the United States to open up its agricultural sector,” Mr Srivastava said, warning that doing so would undermine livelihoods of millions, threaten food security and the flood of cheap imports in local markets.
“India must prioritize its national interests and protect its rural economy. Trade cooperation should not come at the expense of our farmers, food sovereignty or policy autonomy.”
In the long run, experts say India must modernize its agriculture, make agriculture more rewarding and become more competitive in order to increase exports. Agri – Unupom Kausik of Business Olam estimates that India’s highest yield could generate a surplus of 200 million tons of rice fields – enough to provide global trade and fight hunger.
“In a sense, Trump is holding a mirror to us. We don’t have much investment in agricultural production capacity,” Mr. Dahl said. “Currently, buying time is the best strategy – maybe you can use the import of cheap industrial supplies in the United States as a trade-off.”
But, in order to get the best results, he said India will have to “play hard balls. Basically, tell the United States – we are willing to negotiate on other fronts, but don’t undermine our agricultural stability”.
Obviously, India’s challenge is to negotiate from a power standpoint – providing enough to keep Washington at the table while protecting its rural backbone. After all, in global trade, such as agriculture, timing and patience usually produce the best harvest. The jury said whether Trump was willing to wait.
