India-US Trade Agreement and Agriculture
The Union Agriculture Minister, Shivraj Singh Chouhan, has stated that the India-US trade agreement will not compel India to open its markets to major crops, including foodgrain, fruits, or dairy products. This statement counters the US Agriculture Secretary, Brooke Rollins, who suggested that the trade deal would increase American farm product exports to India.
Concerns Regarding Major Crops
- India and the US both produce large-acreage crops like soyabean, corn, and cotton.
- Comparison of yields:
- US Corn Yield: Over 11 tonnes per hectare.
- India Corn Yield: 3.5 tonnes per hectare.
- US Soyabean Yield: 3.4 tonnes per hectare.
- India Soyabean Yield: 1 tonne per hectare.
- Large-scale imports of US corn and soyabean could impact Indian agriculture negatively, similar to the effects of Indonesian and Malaysian palm oil imports.
Ethanol Imports
- The US is the largest producer and exporter of ethanol from corn.
- Allowing US ethanol imports for blending with petrol and diesel could face resistance from Indian distilleries using sugarcane and cereal grains.
Opportunities for Trade Liberalization
- India is the US's largest market for tree nuts, with imports projected at $1.5 billion by 2025.
- Current import duties:
- Walnuts: 100% import duty.
- Shelled almonds: Rs 100/kg duty.
- There is minimal domestic cultivation of dry fruits like walnuts and almonds, as well as blueberries and cranberries, suggesting potential for duty reduction.
Balancing Export and Import Interests
- India exports more agricultural products to the US than it imports.
- Defending India's export interests in products like shrimps, spices, and basmati rice is crucial.
- A flexible and proactive approach in trade negotiations is advocated, moving beyond maximalist and defensive positions.
