US trade talks spark fears for India’s small farmers, food security

Proceeding from a new article, South China Morning Post describes that India's highly protected agricultural sector is emerging as a central issue in ongoing trade negotiations with the US. Analysts warn that allowing increased American food imports could threaten the livelihoods of small Indian farmers and disrupt the nation's food security policies.

Reports suggest India has proposed a deal to US President Donald Trump, who had previously criticised the country as a "tariff king." This offer includes removing tariffs on steel, auto parts, and pharmaceuticals from the US, within a specified quota, as part of a reciprocal agreement.

However, the US is pushing India to ease restrictions on its agricultural sector, aiming for greater access to American farm products. The US sees India's agricultural market as a significant opportunity, but India has remained firm in protecting its sector, emphasising food security and the welfare of small farmers.

Biswajit Dhar, a trade expert at the Delhi-based Council for Social Development, notes that most Indian farmers are small-scale producers, making the sector vulnerable to external pressures. Many farms also operate with lower productivity than larger American counterparts, further complicating the situation.

Agriculture accounts for 16 per cent of India’s GDP and supports over 45 per cent of its 1.4 billion people. Dhar explained, “Trade liberalization will hit small farmers hard. This is why India never fully negotiated agriculture in trade deals.”

The US is India’s largest trading partner, with bilateral trade reaching $129 billion in 2024. India recorded a trade surplus of $45.7 billion. Although the US imposed a 26 per cent tariff on India in April, it was later suspended until July pending further discussions.

Analysts predict that agricultural goods will remain a key point of contention. India’s average tariff on agricultural imports is 39 per cent, much higher than the 5 per cent levied by the US. In 2024, agricultural trade between India and the US totaled $8 billion.

The growing pressure for agricultural liberalization may force India to modernize its sector. However, India’s government must balance these demands with the need to protect local farmers from global competition. As Dhar pointed out, India must invest in agriculture to improve its efficiency and protect its agricultural policy.

By Naila Huseynova