US Pressure on India for Market Access
The USA is pushing India to open its markets to American genetically modified (GM) soyabean and maize. This demand is economically and politically significant for the US.
Economic Stakes for the US
- The US exports raw soyabean worth $24.5 billion and maize worth $13.7 billion in 2024.
- Including soyabean meal, maize-derived ethanol, and dried distillers grains, total exports could be around $52 billion.
India's Dilemma
India faces a dilemma that is less economic and more political.
- US soyabean yields are over 3.5 times higher than India's, making American produce more cost-competitive.
- India imports nearly 5 million tonnes of soyabean oil annually, and it might be economically beneficial to import raw soyabeans for oil extraction and meal production.
- Indian maize yields are closer to those in the US, but domestic demand for maize is increasing, driven by the need for feed and ethanol biofuels.
Political and Technological Challenges
India grows soyabean and maize on large hectares, involving numerous farmers whose interests cannot be ignored. The challenge is compounded by policy issues:
- US farmers use GM technology to achieve higher yields through improved pest and weed control.
- Indian farmers lack access to similar GM technology, leading to reduced competitiveness and a shift from being net exporters to importers of certain crops like cotton.
- Policy decisions blocking technology under the guise of Swadeshi are counterproductive.
The pressure from the US is an added challenge to India's existing agricultural policy issues.
