Understanding the Risks of Reducing Duties on US Farm Imports in India-US Trade Deal

GTRI cautions that permanent reduction of agricultural tariffs would be both irreversible and strategically unsound. (AI image)

India needs to maintain a strong agricultural policy in the proposed India-US trade deal. Reducing import duties on US farm products could threaten national food security, according to GTRI.

Why Reducing Duties on US Farm Products Could Be Harmful

As negotiations continue in Washington, there is pressure to lower tariffs on key US farm exports. These include rice, dairy, poultry, corn, almonds, apples, and GM soy. US products receive significant subsidies, creating unfair competition for Indian farmers.

Threats to Food Security

GTRI warns that reducing tariffs on US farm imports could harm India’s food security. Small farmers would face stiff competition from subsidized imports and shifting market dynamics.

Dairy and Poultry Issues

India’s dairy regulations prevent US dairy products from entering the market. These rules state that animals cannot be fed meat, blood, or internal organs. The US finds these rules too restrictive, but India is concerned about health risks.

India’s dairy sector supports millions of small farmers. Opening it up to US imports could devastate their livelihoods.

Relaxing poultry import rules would hurt domestic producers. India’s cold storage and health safety measures are not robust enough to handle imports.

GM Food Regulations

The US dislikes India’s rules on GM food, calling them unclear and unscientific. However, India is cautious due to public resistance to GM foods and environmental risks.

Importing GM corn and soymeal could endanger India’s farm sector. GM traits could mix with local crops and harm exports to markets that reject GM products.

Subsidies and Tariffs

US farm exports receive substantial subsidies. For instance, rice gets an 82% subsidy, cotton 74%, and wool 215%. If these goods enter India duty-free, they could undercut Indian producers and distort markets.

India uses tariffs to support its farm sector, which employs over 700 million people. Tariffs range from 0% to 150%. They help protect small farmers, manage price fluctuations, and maintain food security.

The US also has high tariffs on some products, like tobacco at 350%. They use complex duties to protect their farm sector, a fact often overlooked in trade talks.

Key Considerations

• India must safeguard its food security and small farmers.
• US farm products receive significant subsidies, creating unfair competition.
• India’s strict rules on dairy and GM foods are for health and environmental reasons.
• Tariffs help protect India’s farm sector and manage price fluctuations.
• The US also uses high tariffs to protect its farm sector.