Discontent over India–US trade deal: Farmers allege ‘government bowed to Trump’

The newly announced India-United States trade agreement has sparked political and social backlash, with farmer organisations accusing the Centre of compromising domestic agricultural interests. 

While the government has described the pact announced by Prime Minister Narendra Modi and US President Donald Trump as a “game-changer” for economic growth, critics argue it could severely impact Indian farmers and the dairy sector.

The Samyukta Kisan Morcha (SKM), which spearheaded the 2020-21 farmers’ agitation, has condemned the deal, alleging that the government has “bowed to American imperialism”. The organisation claims that provisions allowing zero-duty imports of select US products threaten to undermine Indian agriculture.

Farmer unions fear that heavily subsidised American farm produce could flood Indian markets, pushing down prices and depriving domestic farmers of fair returns. They warn that such imports could destabilise the country’s agriculture-based economy if adequate safeguards are not enforced.

President Trump has stated that India is expected to import nearly $500 billion worth of oil, coal, technology and agricultural products from the US under the agreement. However, economists have questioned this projection, noting that India’s total goods imports currently stand at around $721 billion.

Experts suggest that India’s increased imports are likely to focus on crude oil, liquefied natural gas (LNG), advanced semiconductor chips and nuclear technology over the next five years. In return, the US has agreed to cut tariffs on Indian exports by 32 per cent, a move expected to benefit sectors such as textiles, gems and jewelry.

The government has sought to allay concerns, clarifying that key agricultural commodities including food grains, corn, soybeans and genetically modified (GM) products may be excluded from the agreement. 

Officials have also assured that the interests of the dairy and animal husbandry sectors will remain protected. Authorities stated that any import concessions would be introduced gradually to minimise disruptions to local industries. 

India’s trade deal with the United States will not compromise the country’s agriculture and dairy sectors, Commerce and Industry Minister Piyush Goyal asserted on Tuesday following widespread criticism by the opposition.  

Implying that opposition parties have found the taste bitter even before the pudding has been brought out, the minister also pointed out that though formalities have been completed, the trade deal has not yet been inked.

Washington does gain market access to India, as will New Delhi to the United States, but the details are still not out.

An agreement with such a large market, if implemented effectively, can substantially boost India’s exports, broaden market access, and underscore the strategic importance of sustained cooperation between two of the world’s largest democracies, as observed by industry bosses.

The tariffs imposed earlier had affected India’s exports to the United States, where exports fell from $6.86 billion in August to $6.30 billion in October, while imports in the respective months rose from $3.60 billion to $4.84 billion.

No American farm or dairy products will get market access in India, and New Delhi will safeguard millions of its small farmers and cooperatives from cheap imports, stated Goyal.

Rather, "this agreement unlocks unprecedented opportunities for farmers, MSMEs, entrepreneurs, and skilled workers to Make in India for the world, Design in India for the world, and Innovate in India for the world", he added.

While US President Donald Trump said that India has agreed to move its tariffs and non-tariff barriers on US goods toward zero, he has not specified which sectors would be covered under the proposed move.

As Goyal shared on Tuesday, negotiating teams are still at the table.