This is the challenge posed by US Secretary of Commerce Howard Lutnick in an interview where he accused India of obstructing US farmers and not permitting India to open its agricultural market by suggesting quotas or limits as one of the solutions. It was evident from his statements that America had plans of making headway with Indian agriculture while accusing the latter for restricting US farmers.
Context of a trade war
The Trump administration’s multiplying protectionism set a whipsawing trade war into motion with strong retaliatory tariffs that are planned for effect from April 2. An Indian tax rate on imported goods is an imposition on trade, and Trump has called India a \”tariff king\” and a “big abuser” of trade relations because of this.
Relative success of Indian agriculture
The success for Washington was far-fetched in convincing India to have free markets the way America wanted, as India protected their agricultural markets with their claim of securing the need for food and livelihood for small farmers in this country. From being a deficient country and a challenge, India has become a food surplus agriculturally strong nation now.
India was once reliant on food aid in the 50’s and 60’s but after agricultural reforms the nation is today self sufficient and India being the world’s 8th largest agricultural exporter to the world, shipping out grains, fruits and dairy products around the globe.
Has India achieved challenges in Indian agriculture?
Indian agriculture has achieved these milestones, settlement of farming productivity, productive areas that are not developed and infrastructure improvement while being lagging in the termed parameters. The matter is made more complex due to variances in global pricing and climate change. Crop yields are always lower than global standards and with small landholdings, it becomes worse – an Indian farmer has less than a hectare, unlike an American farmer who had over 46 in 2020.
Trade Dynamics Between India and the US
Farm bilateral trade between the two countries is at eight billion. India continues to export products such as rice, shrimp, honey, while the US exports their almonds, walnuts, and apples. While both work on a trade deal, experts have indicated that Washington looks to increase “big-ticket” farm exports such as wheat and corn to combat their $45 billion trade deficit with India.
Uneven Playing Field
Many experts suggest that the hiding of lower Indian farm tariffs with pressure to use genetically modified crops overlooks the difference in basic agricultural practices of the two nations. The Us Pays too much money to support its agriculture, and some subsidize more than 100 percent of the production cost. This leads to a highly unequal competition which will be harmful to India’s smallholder farmers.
Domestic Agricultural Struggles
India’s agricultural problems are not only external. A big portion of the problems the sector is facing can be attributed to domestic issues. The private sector has shown little interest in developing agriculture and is, at best, a passive spectator. Smallholder farmers, who represent over 85% of all landowners, do not have the needed capital for investments. Agriculture as a whole receives less than 6% of the infrastructure investment, which means critical activities like irrigation and storage are chronically underfunded.
Farmer Agitation and Government Assistance
To safeguard the livelihoods of millions, the Indian government applies an import tariff and offers price support for specific crops. Unfortunately, this aid does not instill much faith amongst farmers. Thousands of them turned out to protest for higher prices — four years ago — along with legal guarantees on the minimum support price for staples such as rice and wheat.
Striking a Balance in Trade Deal Discussions
Trade deals often complicate the already convoluted situation with agriculture in India. Analysts believe that India must be careful in concluding a trade deal with the US that would take into consideration the export interests of American farmers whilst, at the same time, protecting Indian agriculture.
Progressing Forward
Experts caution that opening up the agriculture sector to American influence would not be a wise move, as it is likely to impact food security and rural employment negatively. With agricultural spending projected to rise in time, it is crucial for the nation to defend its rural economy and prioritize national interests. Increasing competitiveness and export potential through modernization is essential in the long term.
As Unupom Kausik of agri-business Olam points out, with the best yields from around the world, India would be capable of producing a surplus of 200 metric tonnes of paddy, which would be enough to aid in global trade and help alleviate hunger issues.
To put it straightforwardly, India’s hurdle is to make a deal when it still able to get something done with the US while taking steps towards the reassurance of its agricultural products surviving the deal. In trade, just like in farming, time and patience play a big role. The question is, will Trump be patient enough?
