The United States, under President Donald Trump, is urging India to open its agricultural sector, particularly for products like corn and soybean. This pressure comes partly due to domestic political reasons in the US, as farmers in states like Iowa are a key voter base for Trump. Experts like agricultural scientist Ashok Gulati have suggested that India might benefit from opening up its agriculture and dairy sectors to the US, citing potential export gains and questioning current import duties. Gulati argued that India imports a significant amount of farm products and could gain from trade with the US.
One point of contention is India’s refusal to allow imports of genetically modified (GM) corn from the US. Gulati stated that this restriction is based on ideology rather than science, as India already imports GM soybean oil and uses GM cottonseed for edible oil and animal feed. He pointed out that India needs around two million tons of corn and its own production is about 42 million tons, suggesting that importing GM corn for feed or industrial use should not be a problem. The NITI Aayog, a government think tank, previously supported importing GM corn and soybean but later withdrew its recommendation after facing criticism from farmer groups.
However, a closer look reveals a more complex picture. India is heavily reliant on edible oil imports, with over 55% of its needs met through foreign sources. While the US offers raw GM soybean, India currently imports soybean oil from countries like Argentina, Brazil, and Russia. The country’s dependence on palm oil, primarily from Indonesia and Thailand, remains significant. The argument for importing US soybeans to help India’s edible oil situation is not entirely clear, as India already sources soybean oil from other nations.
Regarding corn, India is a major producer and exporter. The Ministry of Commerce and Industry has stated that India is the fifth-largest producer and 14th-largest exporter of maize globally. More than 60% of India’s corn production is used for animal feed, and 20% for industrial purposes. India has also achieved its target for ethanol blending in petrol (E20) ahead of schedule, using sources like sugarcane and corn, suggesting that the need for US corn for ethanol production is not pressing.
In the dairy sector, India boasts the world’s largest dairy industry and is a significant exporter of milk and dairy products. Per capita milk availability in India is already high, exceeding recommendations. The US has also faced cultural sensitivities regarding its milk, with rumours of animal parts in cattle feed leading to concerns about “non-vegetarian milk.” India’s existing regulations and the strong opposition from its dairy sector, particularly from women involved in the industry, present further hurdles.
Ashok Gulati himself has previously highlighted that Indian farmers face implicit taxes due to distorted trade policies and consumer bias, leading to significant losses. Studies have shown that India suppresses market prices for its agricultural products, while countries like the US provide substantial subsidies to their farmers. The US’s strong-arm tactics in trade negotiations, pushing for market access for its subsidized agricultural products, could potentially harm Indian farmers, especially small and marginal ones, by flooding the market with cheaper imports.