The Indian agrarian community is facing significant challenges due to trade policies influenced by US President Donald Trump. Recent actions by the US have led to a 50% tariff on many Indian imports, with a 25% penalty specifically for India’s purchase of Russian oil. This comes despite Europe, a larger buyer of Russian energy, facing no such tariffs. Prime Minister Modi has reassured the nation, promising to protect small entrepreneurs and farmers. However, the reality on the ground paints a different picture, particularly in the cotton sector.
In response to trade pressures, India has removed import duties on cotton until September 2025, making it duty-free. This decision was later extended to December 2025, with the possibility of further extensions. This move has severely impacted Indian cotton farmers and small traders. The price of cotton has dropped by over Rs 1,100 per candy, and India, a major cotton producer, now finds itself importing cotton from the US. This situation is concerning given that India’s agricultural exports to the US were projected to reach $7.7 billion in 2025, while US agricultural exports to India were expected to be around $3.5 billion.
India’s agricultural exports include items like seafood, spices, basmati rice, and processed fruits. In return, India imports products such as almonds, pistachios, soybean, corn, cotton, and ethanol from the US. A consistent feature of trade deals between India and the US, regardless of the US president, is the demand for greater market access for American agricultural products. President Trump has actively pushed this agenda, aiming to support American farmers through subsidies and export incentives, making US products competitive in developing countries like India.
A major concern is that many of the agricultural commodities the US wishes to export to India, such as dairy, ethanol, corn, and soybean, are genetically modified (GM). India, like the European Union, currently restricts GM foods due to potential health and biodiversity risks. President Trump is pushing to overturn these regulations and force open Indian markets to these products. There is a concern that the US might attempt to push substandard products, similar to past situations like the PL-480 program.
Beyond cotton, the US is also targeting India’s dairy sector. India has resisted allowing GM-origin milk and dairy products into the country. Milk is a primary source of income for many Indian farmers. Importing subsidised US milk could cripple the Indian dairy market and harm the livelihoods of millions, while also posing health risks to children.
The US is also looking to export ethanol surpluses to India as an alternative to Russian oil. This raises questions about the effectiveness of the World Trade Organisation (WTO) and international agreements designed to protect farmers in developing nations. While President Trump may appear unpredictable, his actions are strategically aligned with US economic interests. He is seen as undermining the WTO through bilateral pressures.
India, historically supported by African nations and other developing countries, has managed to protect its farmers within the WTO framework. However, the US’s shift towards bilateral agreements bypasses these protections. The US, a founding member of the WTO, has used the system to challenge India on issues like food reserves and minimum support prices. By pursuing bilateral deals, the US aims to achieve what it could not through multilateral channels.
The current situation highlights India’s dependence on the US market for both agricultural and manufactured goods, as well as US remittances that support India’s foreign exchange reserves. This dependence limits India’s options. The article suggests that India could have benefited from strengthening platforms like BRICS++ to create alternative agricultural trade frameworks. Engaging with BRICS++ and collaborating with countries like China, Russia, and Brazil could provide economic and agricultural defence mechanisms.
President Trump’s policies are already creating new advantages for countries like Pakistan and Vietnam, which can now export agricultural and meat products to the US at lower costs. The central question remains: can the Indian Prime Minister effectively counter this agricultural takeover and ensure his government’s actions align with its stated commitments to protect farmers?