US and India discuss access for corn and soybeans in trade talks

Washington insists on expanding agricultural exports, while New Delhi is considering possible concessions.

US President Donald Trump said that he held talks with Indian Prime Minister Narendra Modi this week, the main topic of which was trade.

Why India is seeking a trade deal with the US

Indian exports to the US are taxed with high tariffs – up to 50%, half of which are related to punitive measures for the purchase of Russian oil. This puts pressure on key industries – textiles, jewelry, fishing, leather and engineering, which employ millions of workers.

According to media reports, the US may reduce tariffs on Indian goods to 15-16%, while the success of the negotiations will largely depend on agreements on energy and agriculture.

What concessions does the US demand

The central topics of the negotiations were corn and soybeans. Washington seeks to expand exports of these crops to the Indian market.

India is increasingly using corn to produce bioethanol, but its legislation prohibits the use of imported grain and GM crops. At the same time, the United States mainly grows GMO corn, although some farmers also produce non-GM varieties.

The American side insists on allowing corn imports, arguing that ethanol from it will be used exclusively for blending with gasoline, and not for food purposes.

Why is the United States interested in exporting corn, soybeans and soybean meal

The trade confrontation between the United States and China has made American soybeans too expensive for Chinese buyers, although China is traditionally the world’s largest importer of this crop.

To support farmers suffering from excess supplies, Washington seeks to promote the export of soybeans and soybean meal to India. The US is also pushing India, which has the world’s largest cattle population, to consider buying American soybean meal as a source of protein for animal feed.

Is India ready to open up its market?

New Delhi has traditionally resisted opening up its market to American grains and dairy products, arguing that it needs to protect small farmers. However, industry sources say India may consider partial imports of corn and soybean meal.

Local soybean producers are strongly opposed to importing American products, saying it would hurt domestic farmers, especially given the country’s surplus feedstock.

Bioethanol producers also oppose corn imports, saying such supplies could disrupt the entire ethanol production chain, as domestic capacity already exceeds demand.

In addition, with elections approaching in the state of Bihar, one of the largest corn-producing regions, imports of American grain could anger farmers, an important constituency.

Tags: corn, soybean, India, USA