The Global Trade Research Initiative (GTRI) has cautioned the Indian government against opening up its agriculture sector to US imports under the proposed Free Trade Agreement (FTA), warning that such a move could severely harm Indian farmers, impact food security, and destabilise rural livelihoods.
The warning comes amid ongoing India-US FTA negotiations, where Washington has been pushing for greater market access for its farm produce, dairy, poultry, and genetically modified (GM) crops as a precondition for lowering tariffs on Indian goods.
Key Points from GTRI Report on India-US FTA and Agriculture
| Issue | GTRI Concern | Potential Impact |
|---|---|---|
| US demands for market access | Cheap subsidised US farm products | Price crash for Indian farmers |
| Dairy imports | US large-scale industrial dairy vs Indian smallholder model | Income loss for millions of rural households |
| Poultry imports | Hormone-treated US chicken imports | Health standards and local industry impact |
| GM crops | US push for GM crop approvals | Biosafety, biodiversity concerns |
| Food security | Import dependence | Vulnerability to global price shocks |
GTRI’s Report Highlights
The GTRI report, authored by trade experts Abhijit Das and Ajay Srivastava, stated:
“Opening India’s agricultural market to subsidised US imports under the FTA will devastate Indian farmers. Unlike the US, where less than 2% of the population depends on farming, over 43% of Indians derive primary income from agriculture.”
The report emphasised that US agriculture is heavily subsidised, with total farm subsidies exceeding $50 billion annually, allowing American exporters to dump cheap produce in global markets.
Comparison of India-US Agricultural Profiles
| Parameter | India | United States |
|---|---|---|
| % Population in agriculture | ~43% | <2% |
| Farm subsidy (annual) | ~$27 billion | ~$53 billion |
| Average farm size | 1.1 hectares | 178 hectares |
| Dairy sector | Smallholder-based, unorganised | Large-scale industrial farms |
| GM crop policy | Restricted, precautionary | Widely adopted |
(Sources: FAO, USDA, India Agriculture Ministry)
Potential Sectoral Impacts If India Opens Up
1. Dairy Sector
The US is pressing India to allow duty-free or low-tariff access for its dairy products. However, GTRI warns:
- US dairy farms are large-scale industrial units with average herd sizes of 500-1000 cows, compared to India’s 2-3 cows per household.
- Indian dairy supports over 80 million rural households, primarily landless or marginal farmers.
- Price undercutting by subsidised US dairy will devastate domestic production, impacting food security and rural incomes.
2. Poultry Sector
India’s poultry sector, valued at ₹1.5 lakh crore, could face:
- Influx of hormone-treated US chicken and turkey at cheaper rates.
- Domestic small and medium poultry farmers pushed out of business due to scale disadvantages.
- Food safety concerns, as US standards permit growth hormones and chlorinated chicken banned under Indian FSSAI regulations.
3. Oilseeds and Pulses
India’s oilseed growers may also suffer if US soybean and GM maize products are allowed market access, creating dependence on external supplies and risking domestic crop patterns.
GTRI Recommendations to Government
The report urged Indian negotiators to:
- Exclude agriculture entirely from the FTA, as done by India in past FTAs with Japan and Korea.
- Focus negotiations on manufacturing, services, digital trade, and pharmaceuticals where mutual gains exist.
- Strengthen Sanitary and Phytosanitary (SPS) barriers to protect public health and biodiversity.
- Uphold India’s precautionary policy on GM crops.
Countries Where India Has Protected Agriculture in FTAs
| FTA Partner | Year Signed | Agriculture Market Access Concessions |
|---|---|---|
| Japan | 2011 | Excluded sensitive products like dairy, pulses |
| South Korea | 2010 | Minimal agricultural tariff cuts |
| ASEAN | 2009 | Limited concessions on plantation crops |
| UAE (CEPA) | 2022 | No dairy/poultry liberalisation |
| Proposed US FTA | Under negotiation | US seeking major market access |
Government Response
Commerce Ministry officials maintain that agriculture remains a sensitive sector in all trade talks.
An official said:
“India will prioritise protecting its farmers’ interests. While the US wants greater market access for farm products, negotiations will balance these demands with domestic sensitivities.”
Farmer Unions React
Major farmer bodies including Bharatiya Kisan Union (BKU) and All India Kisan Sabha (AIKS) have backed GTRI’s recommendations.
Rakesh Tikait, BKU leader, said:
“We will oppose any attempt to open dairy or agriculture under the US FTA. Indian farmers cannot compete with their subsidies and industrial scale.”
Estimated Impact on Indian Farmers if FTA Opens Agriculture
| Sector | Estimated Annual Loss (₹ crore) | Jobs at Risk |
|---|---|---|
| Dairy | 35,000 | 4 crore rural livelihoods |
| Poultry | 15,000 | 2 crore direct and indirect |
| Oilseeds & pulses | 18,000 | 1.5 crore farmers |
(Source: GTRI projections based on import parity prices)
US Perspective
From the American side, opening India’s agricultural market remains a key strategic objective. The US Grains Council and National Milk Producers Federation have repeatedly lobbied Washington to include dairy, corn, soybeans, and poultry market access as part of any final deal.
Strategic Analysis: Agriculture As A Negotiation Lever
Trade analysts note that:
- India is using agriculture protection as a negotiation lever to gain favourable terms in IT services and mobility.
- The US may use tariff reductions in labour-intensive goods (apparel, gems, leather) as bargaining chips.
- Agriculture liberalisation remains politically sensitive ahead of India’s state elections and amid global food security concerns.
Key Takeaways
- GTRI warns India against opening agriculture under the proposed US FTA, citing threats to farmers, rural incomes, and food security.
- US seeks market access for dairy, poultry, and GM products under the deal.
- Indian farmer unions and trade experts demand agriculture exclusion, as done in past FTAs.
- Government maintains agriculture will remain protected while pursuing manufacturing and services gains.
- FTA negotiations continue with next official-level talks scheduled in Washington later this month.
What’s Next?
The Commerce Ministry is expected to hold stakeholder consultations with farmer organisations and trade bodies before finalising the contours of the FTA chapter on market access. Final negotiations with the US Trade Representative’s office are scheduled for mid-July 2025 in Washington DC.
Disclaimer
This article is for informational and editorial purposes only. Data are sourced from GTRI’s June 2025 report, Indian government releases, and global trade analysis. Readers are advised to consult official FTA negotiation updates before using content for policy, academic, or legal purposes.
