India risks losing $50 bln in exports over refusal to lower duties on US agricultural products

Agricultural economist Ashok Gulati has warned that India could jeopardize $50 billion in exports if it remains inflexible on agriculture in ongoing trade negotiations with the United States. In an exclusive interview with India Today, he urged India to rationalize tariffs on farm goods and avoid succumbing to “ideological” fears. Gulati emphasized that agriculture is not isolated from the broader economy and called for a balanced approach in trade talks.

Gulati highlighted that India already imports $37 billion worth of agricultural products, with only $2 billion coming from the US, while exporting $5.9 billion to the US. “We are not living in autarky,” he said, noting that 55–60% of India’s edible oil consumption is imported. He argued that refusing all agricultural imports is unrealistic and could threaten significant export opportunities.

Agriculture and dairy have emerged as major hurdles in the proposed India-US trade deal, with the US pushing for lower tariffs on farm goods, while India insists on protecting its farmers and rural economy. Gulati criticized India’s high tariffs, pointing out inconsistencies such as a 10% duty on edible oil and zero on cotton, compared to 45% on corn and 50–60% on soybeans or skimmed milk powder. He believes 80% of Indian agriculture is competitive and overdue for tariff reform.

On genetically modified crops, Gulati called India’s stance inconsistent, noting that 95% of its cotton is GM and used as feed, yet GM corn, primarily for animal feed, is restricted due to ideological rather than scientific reasons. He proposed tariff-rate quotas, such as allowing up to 2 million tonnes of corn imports against a domestic production of 42 million tonnes, to balance trade flows while maintaining competitiveness.

Gulati warned of potential US retaliation if India remains rigid, particularly on shrimp exports, which are worth billions and face near-zero tariffs. A 50% US tariff could collapse this market overnight, with severe economic and political fallout, especially in Andhra Pradesh. He urged negotiators to adopt a “give-and-take” approach, questioning the logic of importing $17 billion in edible oils while protecting other sectors, and called for an end to hypocrisy in trade talks.

Tags: agricultural products, USA, duties, India