Trump’s America First, an Opening for Indian Farms

Trump’s ‘America First’ policy reshapes global trade, creating new opportunities for Indian farms to expand exports, strengthen agribusiness, and tap into U.S. markets.

Table of Contents

Context: The recent announcement of President Trump related to reciprocal tariff could be a chance for India to transition from protectionism to a productivity-driven agri-export strategy.

Challenges for India in Trade with the USA

High Tariff Disparities

India imposes an average tariff of 17% on all goods compared to 3% in the US.
Agriculture tariffs are especially high in India (39% simple average, 65% trade-weighted) compared to the US (5% and 4%, respectively).
The US may introduce reciprocal tariffs that could hurt India’s exports, especially shrimp, basmati rice, processed foods, and honey.

Agricultural Trade Imbalance

India enjoys a trade surplus of $3.46 billion in agricultural trade with the US.
US exports to India include almonds, cotton, ethanol, and soybean oil, but high tariffs (100-150%) on whiskey, walnuts, chicken legs, and skimmed milk powder are major points of contention.

Genetically Modified (GM) Crop Restrictions

India bans GM soy and maize, despite rising demand for animal feed and ethanol.
The US, a global leader in GM crops, wants India to ease restrictions.

Non-Tariff Barriers

Stringent quality standards, lengthy approval processes, and bureaucratic hurdles impact trade.
Limited market access for Indian agri-exports in the US due to high import duties on certain products (butter, bovine meat cuts, fruits & vegetables).

Weak Agricultural Infrastructure

India lacks cold storage, efficient logistics, and export-focused processing units.
Quality certification and traceability issues hinder global competitiveness.

What Needs to Be Done?

Strategic Trade Negotiations

Leverage negotiations under Mission 500 (targeting $500 billion bilateral trade by 2030).
Seek lower duties for high-value agri-exports (bananas, okra, mango pulp).
Offer phased tariff reductions on walnuts, cranberries, cheese, and skimmed milk powder to facilitate trade.

R&D Investments for Agri-Competitiveness

Increase agri-R&D spending from <0.5% to at least 1% of agri-GDP.
Encourage high-yielding crops, sustainable farming practices, and export-driven varieties.

Modernize Agricultural Value Chains

Expand cold storage, logistics, and supply chain infrastructure.
Improve quality certification and food safety standards for easier global market access.
Develop agri-export hubs in key production clusters.

Selective Trade Concessions

Reduce tariffs on low-impact imports like walnuts and blueberries.
Gradual tariff reductions on poultry, dairy, and ethanol to balance trade interests.

Policy Shift from Protectionism to Productivity

Move away from subsidy-heavy agriculture (fertilizers, free power) towards efficiency-driven growth.
Focus on export-oriented policies rather than heavy tariff barriers.