India ought to supply concessions on agricultural merchandise from US equivalent to edible oils and nuts the place home provide gaps exist, and discover responsibility concessions to spice up high-performing exports — together with shrimp, fish, spices, rice, tea, espresso, and rubber — within the US market through the Bilateral Commerce Settlement (BTA) negotiations, a Niti Aayog working paper has argued.
The necessity for calibrated negotiations on agricultural commerce relations between India and the US arises as India has historically maintained comparatively excessive tariffs on politically delicate agricultural sectors to guard farmers, however the US, underneath President Donald Trump, has been aggressively pushing for larger market entry and decrease tariffs, posing a problem for growing international locations equivalent to India.
The working paper dated Could mentioned India can supply some concessions to the US within the “import of soybean oil” to satisfy US calls for to cut back the commerce imbalance, with out harming home manufacturing, as India is the most important importer of edible oil on the planet and the US has an enormous export surplus of soybean.
‘Import soybean seed from US
“We must also discover the choice of importing soybean seed and utilizing it for extracting oil within the coastal areas, then promoting the oil within the home market and exporting the meal, for which there’s ample abroad demand. This may keep away from genetically modified (GM) feed getting into the Indian market,” the paper, authored by Senior Adviser at NITI Aayog, Raka Saxena, and Member of NITI Aayog, Ramesh Chand, mentioned.
“Equally, corn could also be imported for ethanol mixing, and its by-products — like Distiller’s Dried Grains with Solubles (DDGS) — might be solely exported to keep away from GM feed within the nation. US corn is cheaper and can be utilized to satisfy India’s biofuel targets with out disrupting native meals and feed markets,” the paper mentioned.
Notably, soybeans and corn are among the many US high exports to China, the place a commerce battle might have an effect on agricultural commerce between the 2 international locations. In response to a Reuters report, US soybean exports might drop 20 per cent and costs might plunge if the USA and China fail to resolve their commerce dispute, limiting US soybeans from accessing their largest market.
Ease US apple imports
“Indian producers already take pleasure in provide benefits in commodities like rice and pepper. Excessive tariffs on such merchandise by India, that are frequently exported by the nation, might be simply lowered and even eliminated within the bilateral commerce accord. Such tariffs will not be related for commerce with international locations just like the US,” the paper mentioned.
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The Niti Aayog paper mentioned India can contemplate decrease tariffs on agricultural commodities the place both home manufacturing is small or imports don’t compete with home manufacturing as a result of totally different high quality grades and seasons. “For instance, US apples promote at a premium value in Indian retail markets as a result of totally different high quality, lengthy shelf life, and low season availability.”
Enhance exports of fish, spices & espresso
“India ought to negotiate extra entry to the US marketplace for high-performing exports like shrimp, fish, spices, rice, tea, espresso, and rubber. India earns roughly $5.75 billion yearly from agri-exports to the US. Increasing this by way of responsibility waivers or TRQs must be a part of commerce talks,” the paper mentioned.
The authors mentioned that US is anticipated to stay an enormous marketplace for export of surplus meals from India and all efforts have to be made to maintain favorable setting for export to US. “This could embrace strategic opening for US imports into India to attain bigger features in exports. The continued negotiations between the 2 international locations for a bilateral commerce accord appear to be the most suitable choice for resetting long run commerce relationships”.
“Export basket ought to emphasize each, conventional merchandise like fishery and rice offered in giant quantity and a lot of excessive worth merchandise, differentiated merchandise, ethnic merchandise, attribute-based merchandise, well being meals, processed meals and so forth. that are individually small however cumulatively fairly giant,” the paper mentioned.
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Within the final 10 years, India’s agricultural exports to the US grew almost fivefold, from $1.18 billion to $5.75 billion and the share of the US in India’s complete agricultural exports noticed a slight decline, dropping from 11.5 per cent in 2004 to 9.8 per cent in 2024. In the meantime, India’s agricultural imports from the US elevated even quicker, rising from $291 million in 2004 to $2,217.9 million in 2024.