10/02/26, INDIA&US Trade Deal news

India's pledge to address long-standing non-tariff barriers to trade in food and agricultural products from United States, as stated in the joint statement between the two, has sparked concern in some quarters over the potential impact on Indian farmers.

The joint statement issued on February 6 says India will address non-tariff barriers affecting US food and farm products, without specifying the nature of the barriers to be eased.

The reference is worrying because the US has long argued that India's refusal to import genetically modified (GM) products constitutes a major non-tariff barrier, said Biswajit Dhar, acting President of the Council for Social Development.

“There is no clarity on whether that position has shifted,” he added.

Swadeshi Jagran Manch co-convenor Ashwani Mahajan, however, said that addressing non-tariff barriers should not be seen as unusual, noting that non-tariff measures exist across countries.

“The US has around 6,500 non-tariff barriers, while India has about 350,” Mahajan said. However, he cautioned that any relaxation in agriculture must be approached carefully.

“Any relaxation should not include GM products. This is a matter of concern because American farmers receive much higher subsidies, and Indian farmers may not be able to sustain competition. The government must protect Indian farmers, and we will have to see how this protection is ensured,” Mahajan said.

To be sure, Commerce Minister Piyush Goyal has said that no genetically modified food imports are being allowed.

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said that India's agreement to address non-tariff barriers could mirror provisions in US trade deals, such as with Malaysia, where American sanitary and health certifications for agricultural products prevail over domestic standards, a one-sided concession, which could be sought from New Delhi as well.

Tackling tariffs

On tariffs, the joint statement said that India has offered reductions on some food products, including dried distillers' grains (DDGs), tree nuts, fresh and processed fruits, soybean oil, wines and spirits.

Srivastava said concessions on certain food products could have implications for Indian farmers.

“Tariff cuts on products such as apples, oranges and soybean oil are likely to hurt Indian farmers,” Srivastava said, adding that it remains unclear which additional agricultural products may also be covered.

The joint statement adds that tariff concessions will also apply to “additional products,” without specifying if more food and agricultural items are covered beyond those explicitly listed.

Mahajan, however, said that using tariff rate quotas for agricultural imports will allow authorities to assess domestic requirements and prevent injury to local producers.

Economist Ashok Gulati said the overall framework should be viewed as a balanced trade arrangement, with India's principal gains lying outside agriculture.

“The biggest gain for India is the sharp reduction in US import duties on labour-intensive exports such as textiles, apparel, leather, gems and jewellery,” Gulati said.

On agriculture, Gulati said the openings appear limited. “What has been allowed is mainly access to the feed market through dried distillers' grains (DDGs) and some premium products like nuts, berries, wines and spirits. This is unlikely to adversely impact farmers,” he added.

India has not granted concessions on sensitive food and agriculture items, including dairy, maize, soy meal, sugar, millets, citrus fruits, rice, wheat, and other staples.

On concerns around the limited concessions offered for American soybean oil and DDGs, experts unanimously say the impact is expected to be limited.

India is a net importer of edible oils and already purchases significant quantities of soybean oil from the US and other countries, Dhar added.

Farmer groups have flagged concerns about the proposed concessions in agriculture and food, specifically DDGs, soybean oil, and certain fruits under the interim trade framework.

They have criticised the interim trade deal framework, saying it could hurt the agricultural sector by increasing access to US imports, even if staples are protected, and that reduced tariffs on products like soybean oil and apples could undercut domestic producers.

Mahajan, however, explained that given apple imports from the US will be allowed at a minimum import price of Rs 80 per kg, retail prices would be around Rs 200 per kg, high enough to avoid significant competition for domestic producers.

Report by Adrija Chatarji for Network18