India-US Agricultural Trade Negotiations
A Niti Aayog working paper suggests strategic concessions and negotiations to enhance India-US agricultural trade relations. These negotiations focus on adjusting tariffs and exploring trade opportunities to benefit both economies.
Key Recommendations
- Concessions on Agricultural Products
- Offer concessions on US exports like edible oils and nuts to bridge domestic supply gaps.
- Explore duty concessions for boosting exports of shrimp, fish, spices, rice, tea, coffee, and rubber to the US.
- Tariff Adjustments
- India maintains high tariffs on sensitive agricultural sectors to protect farmers.
- Consider offering concessions on soybean oil imports without affecting domestic production.
- Import Strategies
- Import soybean seed for oil extraction and export the meal, mitigating GM feed risks.
- Import corn for ethanol blending, exporting by-products to avoid GM feed concerns.
Market Opportunities and Challenges
- US-China Trade War
- Potential decline in US soybean exports could redirect trade focus towards India.
- Enhancing US Market Access
- Negotiate greater access for high-performing exports like shrimp, fish, and spices.
- Annual agri-export earnings to the US are approximately $5.75 billion.
Strategic Trade Approach
- Leverage the US as a significant market for surplus Indian food exports.
- Engage in bilateral trade accords to reset long-term trade relations.
- Focus on both traditional and high-value differentiated export products.
Over a decade, India's agricultural exports to the US increased nearly fivefold, while imports from the US grew even faster, signaling a dynamic trade relationship that requires careful negotiation and strategic planning.