US Major Crops and Market Access in India
The United States focuses on three major crops for securing market access in India: soyabean, corn (maize), and cotton. This is significant as the US President, Donald Trump, has suggested reciprocal tariffs on Indian exports. The US is a substantial exporter of these commodities, with combined shipments valued at approximately $62 billion in 2022.
China's Role and Market Changes
- China is the largest market for US soyabean and cotton, although its imports have decreased from $17.9 billion in 2022 to $12.8 billion by 2024 for soyabean, and from $2.9 billion to $1.5 billion for cotton.
- China was also the leading corn importer from the US, with imports peaking at $5.2 billion in 2022, then dropping to $328 million by 2024.
- Mexico and Japan have become top buyers of US corn since 2023.
India as a Potential Market
The USDA projects that India's demand for animal products such as milk, eggs, fish, and meat will increase, which in turn will drive demand for feed ingredients like corn and soyabean by the early 2030s. This presents a significant market opportunity for American exports.
- India's domestic corn consumption is expected to increase from 34.7 million tonnes (2022-23) to 200.2 million tonnes by 2050 under rapid income growth scenarios.
- Soyabean meal consumption could rise from 6.2 million tonnes (2022-23) to 68.3 million tonnes by 2050 under similar conditions.
- Projected imports by 2040 and 2050 for these scenarios include 46 million and 134 million tonnes of corn and 19 million and 53 million tonnes of soyabean meal, respectively.
Challenges and Opportunities
India currently imposes a 45% customs duty on soyabean and 50% on corn imports, along with GM product restrictions, posing challenges for US exporters. Nevertheless, India is viewed as a promising market for US corn and soyabean despite these barriers.
India's Cotton Production and Import
- India's cotton production rose from 13.6 million to 39.8 million bales between 2002-03 and 2013-14, but has since declined to 29.9 million bales in the current year.
- India is transitioning from a major exporter to an importer of cotton, with imports projected at 3 million bales in 2024-25.
- This shift could boost US cotton exports to India, especially if the current 11% duty is removed.
The US considers India a crucial market for its agricultural exports, particularly as China's demand shifts. The potential removal of trade barriers could further enhance US-India trade relationships in these sectors.