The new India-US trade deal is expected to have mixed effects for Indian farmers and US companies, especially in the agriculture and dairy sectors.
Impact on Indian Farmers:
High Risks for Small Farmers: If India lowers tariffs on US dairy and agricultural products, millions of small Indian farmers could be at risk.
Even a small increase in US imports—just 5% market share—could displace 3–4 million marginal dairy farmers. The US has a significant productivity advantage, with much higher milk yields per cow than India.
Threat from Subsidized and GM Crops: US agriculture is heavily subsidized, and American companies are pushing for access for genetically modified (GM) crops like soybeans and maize. Experts warn that allowing
these imports could cause a crash in prices for Indian farmers, especially for the 24 million who grow soybeans and maize. This could further impoverish farmers, as domestic prices may fall below government-set minimum support prices.
Livelihoods at Stake: Over 700 million Indians depend on agriculture for their livelihood. Opening up the market to US agricultural products could lead to dumping of cheap, subsidized goods, threatening food
security and rural incomes.
Impact on US Companies:
Market Access and Competitiveness: US companies stand to gain significant new access to India’s vast market of 1.4 billion consumers. Lower tariffs would help American businesses compete more effectively,
especially in sectors like agriculture, dairy, automobiles, and industrial goods.
Potential for Growth: The US is particularly interested in exporting more farm products such as maize, soybeans, cotton, and dairy to India, which could help reduce the US trade deficit with India.
Regulatory Barriers Remain: While tariff reductions are helpful, US companies still face challenges from India’s non-tariff barriers and strict quality control regulations, which can limit the actual impact of
the deal.
Summary Table:
Group
Potential Benefits
Key Risks/Challenges
Indian Farmers
Avoidance of steep US tariffs on exports
Loss of income, price crashes, competition from subsidized/GM US imports, threat to small/marginal farmers
Indian non-tariff barriers, regulatory hurdles, limited scope if India protects sensitive sectors
Overall :
The deal’s main immediate benefit for India is avoiding a steep 26% US tariff on its exports, which would help Indian exporters remain competitive. However, unless India maintains protections for its agriculture and dairy sectors, the
livelihoods of millions of small farmers could be at risk. For US companies, the deal could open up new opportunities in India, but success will depend on how much India is willing to open its markets and relax regulatory barriers.
US, India Rush to Finalize Tariff-Reducing Trade Deal as Disputes Over Dairy and Agriculture Persist
With just days left before a major tariff deadline, the United States and India are working around the clock to finalize an interim
trade deal that could lower tariffs and boost economic ties. However, talks remain stuck on sensitive issues—especially agriculture and dairy—where both sides are refusing to back down.
What’s at Stake?
The US has threatened to raise tariffs on Indian goods to 26% if a deal is not reached by July 9. Currently, a temporary 10% tariff is in place to allow time for negotiations.
Both countries want to avoid these higher tariffs, which would hurt exporters and consumers on both sides.
Key Disagreements
The US is pushing India to open its markets for American farm products, including genetically modified crops and dairy. These are politically sensitive in India, where the dairy sector supports over 80 million people, many of them small farmers.
India has firmly refused to allow more US dairy imports or genetically modified crops, citing risks to food safety and the livelihoods of rural families. “There is no question of conceding on dairy. That’s a red line,” said a senior Indian official.
India also wants the US to lower tariffs on its labor-intensive exports like garments, footwear, and leather, which are important for jobs in India.
Progress and Hopes
Despite the deadlock on agriculture, negotiators have made progress in other areas, such as reducing tariffs on walnuts, cranberries, medical devices, automobiles, and energy products from the US.
Both sides see this interim deal as a first step towards a broader agreement that could double trade to $500 billion by 2030.
Why Is This Important?
The deal is not just about economics. Both countries see it as a way to strengthen their partnership at a time of global uncertainty and competition.
US President Donald Trump has said he is optimistic about reaching a deal that will help American companies compete in India’s vast market of 1.4 billion people.
What Happens Next?
Indian negotiators have extended their stay in Washington, hoping to bridge the gap before the July 9 deadline.
If no deal is reached, tariffs will rise, making many products more expensive and possibly straining relations between the two countries.
As the clock ticks down, both Washington and New Delhi are under pressure to find common ground, without compromising on their core interests. The outcome will affect not just trade, but the broader relationship between two of the world’s largest democracies.
Basmati Exports to Iran Halt Amid Conflict; Industry Shifts Focus to India-Managed Chabahar Port
Introduction: As tensions escalate between Iran and Israel, India’s basmati rice exports to Iran have come to a halt, while shipments to the Middle East have become more expensive. The Indian government is now looking to strengthen connectivity through the India-managed Chabahar Port to safeguard trade routes.
Details: The ongoing Iran-Israel conflict has started to impact Indian trade, particularly basmati rice exports to Iran, which have completely stopped, according to industry sources. Exporters are now facing higher freight and insurance costs when shipping to West Asian markets, raising concerns across India’s rice export sector.
In response, the Ministry of Commerce recently held a high-level meeting with shipping lines and container associations to assess the unfolding situation. Officials confirmed that the Strait of Hormuz—a critical trade route—is still stable and under close monitoring through a ship reporting system.
However, if the conflict continues beyond June 23, trade movements to Russia, Central Asian nations (CIS), and Afghanistan through Iran’s Bandar Abbas port could also be affected. The Federation of Indian Export Organisations (FIEO) noted that this port remains crucial, especially for accessing landlocked nations like Uzbekistan, which are now cut off from Karachi due to rising regional tensions.
As a long-term solution, exporters and industry leaders are now urging the government to enhance infrastructure and logistics at the Chabahar Port, managed by India. Chabahar provides an alternative route with direct links via Dubai and India’s Kandla Port, reducing dependency on conflict-prone areas.
Additionally, trade dynamics are shifting across the region. Freight charges and transit times have increased for key Red Sea ports like Aqaba, Beirut, and Lattakia, with goods being rerouted to safer ports such as Jeddah and Alexandria. Interestingly, exports to Saudi Arabia are witnessing a rise, driven by demand from the ongoing Neom city megaproject.
With geopolitical uncertainties continuing, the industry is calling for urgent action to improve multi-modal connectivity, diversify trade routes, and minimise the impact of global conflicts on India’s crucial agri-exports. The spotlight is now on Chabahar to serve as a resilient gateway for India’s exports to Central Asia and beyond.
Introduction: Andhra Pradesh CM Chandrababu Naidu has urged Union Home Minister Amit Shah to roll back the Centre’s recent decision to reduce import duty on crude palm oil (CPO) by 10%. He warned that this move could severely affect farmer incomes and derail the country’s edible oil self-reliance efforts.
Andhra Pradesh Chief Minister N. Chandrababu Naidu has raised strong objections to the Central Government’s decision to reduce import duty on crude palm oil (CPO) by 10%, calling it a setback for Indian oil palm growers. In a formal letter submitted to Union Home Minister Amit Shah on June 20, 2025, Naidu urged for an immediate rollback of the policy.
The Centre’s decision, notified on May 30, comes at a crucial time—right in the middle of the oil palm plantation season. Naidu warned that the timing of the duty cut could lower the market price of domestic palm oil, demoralising existing growers and discouraging new farmers from entering this high-potential sector.
“This decision may seem helpful in the short term, but it undermines the long-term vision of India’s edible oil self-sufficiency under the National Mission on Edible Oils – Oil Palm (NMEO-OP),” the CM stated.
Andhra Pradesh is at the forefront of India’s oil palm revolution, accounting for over 50% of the total cultivated area, with 1.74 lakh farmers across 2.49 lakh hectares. Between 2021 and 2025, the state has covered 67,727 hectares and aims to add another 50,000 hectares this year under the NMEO-OP.
Naidu pointed out that Andhra Pradesh has been proactive in promoting oil palm cultivation by offering incentives, building infrastructure, and using AI-powered tools to support farmers. “Decisions like this could break the trust that has been built over the years with our farmers,” he warned.
The letter was submitted in person by a TDP delegation led by MP Lavu Sri Krishna Devarayulu and Union Civil Aviation Minister K. Rammohan Naidu, highlighting the state’s deep concern over national policy decisions that could undo years of progress in oil palm farming.
With stakes high for farmer income and the success of India’s edible oil mission, the ball is now in the Centre’s court to decide whether economic stability for growers will take precedence over short-term import cost management.
Union Agriculture Minister Shivraj Singh Chouhan today unveiled an ambitious vision for India’s agricultural future, announcing the Centre’s resolute goal to transform the nation into the “food basket of the world.” Addressing a gathering of farmers at the ICAR-IIHR campus in Hessarghatta, on the outskirts of Bengaluru, as part of the ongoing Viksit Krishi Sankalp Abhiyan, Minister Chouhan emphasized that India’s agricultural aspirations now extend far beyond merely feeding its own 145 crore citizens.
To achieve this monumental objective, the Union Government plans to forge strong collaborations with State Governments, agricultural universities, Krishi Vigyan Kendras (KVKs), farmers, and scientists. This collective effort will culminate in a comprehensive roadmap designed to bolster agricultural productivity, innovation, and global competitiveness. The Minister highlighted that the Viksit Krishi Sankalp Abhiyan initiative is intrinsically aligned with Prime Minister Narendra Modi’s overarching vision of a ‘Viksit Bharat’ (developed India) by the year 2047, underscoring the campaign’s core motto of ensuring holistic development of the agriculture sector nationwide.
A cornerstone of this strategy is the recently launched ‘Lab to Land’ initiative, a massive outreach program involving over 16,000 scientists. These experts are actively engaging with farmers across the country, providing crucial scientific knowledge, best practices, and direct support. Minister Chouhan shared impressive statistics, revealing that in just the last ten days, 1,896 teams have interacted with approximately 9 lakh farmers across 8,188 villages. In Karnataka alone, more than 70 interdisciplinary teams, comprising scientists and officials from agriculture and allied departments, are visiting farms daily. These teams are diligently recording direct feedback from farmers, which will be instrumental in shaping need-based, problem-oriented agricultural research programs. So far, 639 such teams have visited 2,495 villages in Karnataka, reaching out to 2,77,264 farmers.
Minister Chouhan articulated that the Viksit Krishi Sankalp Abhiyan envisions a unified approach encapsulated by the motto ‘One Nation, One Agriculture, One Team’. To ensure farmers receive fair prices for their hard-earned produce, the Centre has pledged to bear the transportation costs of agricultural produce under the Market Intervention Scheme (MIS). The event also served as a platform to honor excellence in agriculture, with Minister Chouhan felicitating seven outstanding farmers from Karnataka: Ratnamma, Gopal Gowda, Padmini Gowda, H.K. Raghu, Mangalamma, Mahesh H.N., and Sreenivas, acknowledging their significant contributions to the state’s agricultural landscape.
India is poised for a significant expansion in its global agricultural trade footprint, as highlighted by Abhishek Dev, Chairman of the Agricultural and Processed Food Products Export Development Authority (APEDA). Speaking at the inauguration of Indusfood 2025 in Greater Noida, Dev pointed out that despite being the world’s seventh-largest agri exporter, India currently accounts for a mere 2.4% of the colossal $2 trillion global agriculture trade. He emphatically stated that this modest share represents a “huge opportunity” for Indian exporters to dramatically scale up their operations and presence on the international stage.
India’s agri exports were valued at approximately $50 billion in the 2023-24 fiscal year, and concerted efforts are underway to further elevate this figure in the current fiscal year. Dev emphasized the nation’s strategic pivot towards exporting more value-added products, moving beyond simply trading raw agricultural commodities. This shift aims to capture a larger share of the global market by offering processed and diversified food products. A particular focus is on the organic sector, where India currently holds around 2.5% of the $147 billion global organic market. APEDA has set an ambitious target to quadruple this share over the next five years, building on the steady growth witnessed in organic exports—from $213 million in 2012-13 to nearly $495 million in 2023-24.
Indusfood 2025, a flagship event organized by the Trade Promotion Council of India (TPCI) with vital support from the Department of Commerce, was inaugurated by Union Food Processing Industries Minister Chirag Paswan. The prestigious event has drawn an impressive congregation of over 2,300 exhibitors from 30 countries, alongside 7,500 international buyers and 15,000 domestic buyers and trade visitors, creating a vibrant platform for global food and beverage commerce.
Mohit Singla, Chairman of TPCI, elaborated on the multifaceted goals of Indusfood, stating that it extends beyond merely boosting trade. The event also aims to forge crucial connections between farmers and technology providers, thereby enhancing income opportunities through value addition and direct access to global markets. Singla noted the remarkable growth in international participation, with the exhibitor pavilion nearly doubling in size since last year, boasting strong representation from approximately 30 countries, underscoring the increasing global interest in India’s agricultural and processed food sector.
