Opinion: India-US trade deal is too costly for farmers

LIKE the Shakespearean predicament, the bigger dilemma is who to believe and who not to believe. While US Agriculture Secretary Brooke Rollins has thanked US President Donald Trump for a promising trade deal with India that "delivers for the American farmers". Meanwhile, Commerce Minister Piyush Goyal, too, applauded PM Narendra Modi for a "historic" deal with America, underscoring that India's sensitive agriculture and dairy sectors have been duly protected.Whether it is a win-win situation for both democracies or an outcome of bullying and high-handedness, only the details will confirm. But what is in the public domain has already sent jitters down the spine of farm unions across the country. They have enough reasons to be worried.At a time when domestic agriculture continues to face distress, with farmers realising farm prices 30-40% lower than the minimum support price (MSP) announced, any further opening of India's vast market for cheap and highly subsidised agricultural produce will severely hit farm livelihoods.Already, American farmers receive massive subsidies every year, estimated at $66,314 per farmer per year (Agricultural Resource Management Survey, 2020), which insulates them from the volatility of the markets. Besides, the US Administration plans in 2026 to provide $12-billion of per-acre commodity payments to farmers under the Farmers Bridge Assistance Program (FBA) to cover the losses incurred. Trump had referred to it as 'One Big Beautiful Bill'.While the finer details of the US-India trade deal are still awaited, both the US and India are making loud claims. Brooke Rollins had even announced on social media that the deal would result in the "export of more American farm products into India's massive market, lifting prices and pumping cash into rural America."This follows the broad contours of the trade deal that were announced by the US President on X, which slashed tariffs from 50% to 18% for Indian goods entering the US and reduced import tariffs to zero for the US exports, in addition to removing the non-tariff barriers.Meanwhile, Agriculture Minister Shivraj Singh Chouhan has been assuring farmers that the deal has been struck after carefully 'safeguarding' their interests.Farm leaders threaten protestsDespite the assurances, the India-US trade deal has agitated the farming community. Questioning India’s silence, which is refraining from providing any more details, many farm leaders have expressed doubts on farmers' interests having really been protected. The Samyukt Kisan Morcha (SKM) that led the iconic farmers’ protest around New Delhi in 2020-21, has warned that reducing import duties to zero will bring a flood of cheaper imports, and it has threatened fresh protests beginning February 12. Farmer leaders say the proposed protests would be on the lines of the 2020-21 protests.What infuriates the farming community is that while Budget 2026 has remained largely silent on measures that are needed to prop up farm incomes, there has not been any farmers' consultation on where to draw the red line in protecting the farm sector which is reeling in crisis.Further, the Organisation for Economic Cooperation and Development (OECD), the richest trading bloc, has in its latest report, estimated that Indian farmers had suffered a cumulative loss of Rs 111 lakh crore between 2000-01 and 2024-25 and that it would be difficult for farmers to sustain another strong blow. "It will not only be a big blow. It will be like a sledge-hammer striking a hapless farming community," warns Harish Chauhan, president of apple growers in Himachal Pradesh.The free trade agreements (FTAs) with the European Union and New Zealand have already provided unprecedented market access for apples, as a result of which the apple industry in the hill states fears being systematically wiped out, he has lamented.Apples, cotton examples of slumpIf US apple imports are allowed at zero duty, their apple economy will face ruin, he warns. Already cotton growers, soy producers and onion farmers have been reeling under depressed prices and the zero duty imports will force farmers to abandon these crops in view of any further slump expected in market prices from cheaper imports.Although Trump talks of $500 billion worth of US exports per year — that includes energy, technology, coal and agriculture — some analysts believe that the exports will probably be around $100 billion a year spread over five years. It does not, however, mean that the entire export basket from the US will comprise agricultural produce, dairy and allied sectors.In some commodities, like cotton, pulses and onions, reports say a quota access will be provided. Nevertheless, what cannot be ignored is the warning that importing food is like importing unemployment.Take the case of cotton. The removal of the 11% tariff on cotton import between September and December 2025 had brought an influx of cheaper cotton, as a result of which the domestic prices fell. While the textile industry rejoiced at the low prices, farmers suffered. In three months, imports surged by 3 million bales and prices dropped by Rs 1,000-1,500 per quintal.Moreover, since the non-tariff barriers have to be removed, and India already has a few hundred of these, how will India protect consumers from the US milk imports that are reported to be coming along with non-vegetarian content.The new trade regime that Trump is forcing down the throat of developing countries — and is even eyeing the EU — violates World Trade Organisation (WTO) norms. What the US failed to achieve ever since the WTO was created in 1995, it is now managing to hammer. With countries bowing to pressure, a new world order is emerging. How long the dictum 'might is right' will prevail, only time will tell.

Opinion: India-US trade deal is too costly for farmers

Opening of India’s vast market for cheap and highly subsidised agricultural produce will severely hit farm livelihoods

Devinder Sharma

Opinion: India-US trade deal is too costly for farmers

Opening of India’s vast market for cheap and highly subsidised agricultural produce will severely hit farm livelihoods

Devinder Sharma

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