Why Indian Farmers Fear the U.S.-India Bilateral Trade Agreement
In February this year, India and the United States announced a framework for an interim trade agreement, paving the way for negotiations on a broader U.S.-India Bilateral Trade Agreement (BTA) in 2025. The interim deal, aimed at reciprocal market access and resilient supply chains, has sparked concern among Indian farmer groups who fear adverse impacts on their livelihoods.
During a visit by U.S. Trade Representative Jamieson Geer to New Delhi on June 24, meetings with Commerce Minister Piyush Goyal reviewed the core elements of the interim agreement and the broader BTA. Meanwhile, farmer organisations such as the Samyukt Kisan Morcha (SKM), a coalition of about 500 farmer associations, along with the Samyukta Kisan Morcha (Non-Political), Kisan Mazdoor Morcha, and Bhartiya Kisan Union (Chaduni), have been holding protests and events to voice their concerns.
Key terms of the interim agreement
The interim agreement includes provisions for India to eliminate or reduce tariffs on U.S. industrial goods and a wide range of food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, among others. India has also agreed to address long-standing non-tariff barriers to trade in U.S. food and agricultural products. These terms have raised alarm among farmers and horticulturists who fear for their livelihoods.
Why farmers are worried
Farmer groups argue that opening India’s agricultural markets to heavily subsidised American produce would make it difficult for domestic farmers to compete. The U.S. agricultural sector operates on large landholdings, higher subsidies, and economies of scale, enabling producers to export at lower prices.
Specifically, cheaper imports of feed substitutes such as DDGs and soybean oil could depress prices of maize and soybeans. India has been nearly self-sufficient in cotton, producing double the amount of the U.S. Any reduction in cotton import duties could hurt domestic cotton prices, particularly in states like Gujarat, Maharashtra, Punjab, and Haryana, which have already seen a decline in prices. Cotton imports are currently regulated through quotas, and any relaxation on U.S. imports could be disastrous.
Furthermore, easing non-tariff barriers could increase the risk of introducing Genetically Modified Organism (GMO) material and the spread of new pests, plant diseases, and invasive weeds, threatening India’s agricultural ecosystem. The U.S. is the second-largest producer of soybeans after Brazil, with 96% being GM soy. Imports of soybean oil and DDGs for animal feed could seriously impact India’s 4 million soybean farmers and related industries. Farmer bodies fear that the agreement would allow foreign companies to dominate the agricultural sector.
Orchardists' concerns
Apple growers in Kashmir, Himachal Pradesh, and Uttarakhand are particularly anxious. In Kashmir, around 1.5 million families are involved in the apple trade, generating an estimated ₹30,000 crore annually. Himachal Pradesh produces apples worth ₹5,000–6,000 crore each year, engaging over 150,000 families. Orchardists fear that cheap imports could collapse the domestic apple industry.
Kuldeep Singh Rathore, a Congress MLA from Theog constituency in Shimla district, introduced a resolution in the Himachal Pradesh assembly expressing concern over the potential impact on apple growers. The resolution was passed unanimously, reflecting widespread anxiety among orchardists.
While the agreement aims to boost bilateral trade, Indian farmers remain cautious about its implications for their livelihoods and the broader agricultural sector. The government has yet to address these concerns in detail.
