The world is echoing the geostrategic realignments in global commerce. Free Trade Agreement, which has stirred up a storm of economic and business apprehensions globally, still looms over India. The decisions are not being shaped by the traditional principles of economics. They are surrounded by tussles between two countries, where either party is reluctant to get the short end of the stick, so to speak. As murmurs grow louder around a possible Indo–US Free Trade Agreement (FTA), the jitters among traders are being felt anticipating what might unfold in this most contentious and arguably the most consequential deal. 

India and the US have always been not on equal footing when it comes to farm policy. The United States, with its deeply entrenched system of federal subsidies, crop insurance schemes, and commodity price support programs, sustains its agribusiness backbone with the country splashing out billions of dollars annually. India, meanwhile, remains a patchwork of smallholders and cooperative systems, working within tight fiscal limits and without the cushion of predictable price support for most crops.

This divergence is not just economic—it’s structural. And any negotiation that seeks parity on tariffs, quotas, or access without first acknowledging this imbalance will inevitably lead to dislocation.

Dairy: A Case of Cultural and Economic Collision

The Indian dairy sector is not just an economic unit—it is socio-cultural infrastructure. With over 75 million livelihoods linked to it, any move that dilutes tariff protections for Indian dairy against subsidised US dairy products is bound to create systemic stress. American dairy exporters benefit from subsidies north of $12 billion annually. That’s not a marketplace; that’s a strategic dumping apparatus.

Moreover, practices like rennet use, feed derived from animal byproducts, and mass-scale hormone treatments in the US dairy industry also present barriers that are not merely economic, but cultural and ethical. Opening Indian markets to these imports under an FTA, without stringent safeguard clauses, would invite not only price pressure but public resistance.

Oilseeds and Edible Oils: The Tariff Wall Protects More Than Prices

US soybean production—heavily incentivized and globally overstocked following its trade war with China—poses a similar threat. India, while a major edible oil importer, also supports millions of domestic oilseed growers through mustard, groundnut, and sesame cultivation. Lowering tariffs to accommodate US soybean oil would undercut domestic procurement and jeopardize India’s limited—but critical—push toward edible oil self-reliance.

The 2017 import of yellow peas stands out as a cautionary precedent. In the absence of quantitative restrictions, a flood of cheap yellow pea imports which was largely from Canada and Ukraine has entered the Indian market. This directly jeopardized the fate of domestic chana (gram) and matar (pea) cultivators. Indian farmers were forced to sell below MSP levels despite a bumper harvest that year. This triggered severe distress in major pulse-growing states. Without calibrated tariff structures or minimum entry thresholds in trade agreements, similar influxes could drastically destabilize entire segments of India’s agri-economy, eroding both price incentives and production sustainability.

Poultry and Pulses: Low-Value Cuts, High-Impact Fallout

From chicken legs to lentils, the United States often exports what its domestic consumers reject. These so-called "low-value" cuts are sold overseas at deeply discounted prices—thanks again to domestic support programs. In poultry, for example, India’s entry into US-bound trade obligations following a WTO dispute has already opened limited avenues for American exports. A full-scale agreement would accelerate this trend, harming domestic poultry clusters in Punjab, Maharashtra, and Tamil Nadu.

Lentils and peanuts offer no respite. Following duty reductions in late 2023, pulse imports surged by nearly 90% year-on-year. The result? A setback in India’s long-term goal of achieving pulse self-sufficiency—an effort that took decades to build through farmer outreach, pricing incentives, and agri-extension programs.

Horticulture and Cotton: Sectors at the Brink

The 50% tariff cut on US apples in 2023 has turned Himachal Pradesh and Kashmir’s apple economy into a case study on how global overproduction can cannibalize local supply chains. What began as a diplomatic gesture now risks becoming a long-term structural disadvantage for Indian horticulture, with ripple effects in logistics, cold storage demand, and retail pricing.

Even in cotton—where India is the world’s largest producer—US imports are making inroads. This is not due to quality, but subsidy-induced pricing and preferential logistic channels. An FTA without active safeguard clauses could lead to India’s own cotton mills preferring American cotton—a paradox in a country that was once the world’s textile capital.

Seed Sovereignty and IP Clauses: The Understated Risk

The US, in all its trade agreements, insists on IP clauses that cover genetically modified seeds, biotech inputs, and agrochemicals. India must tread cautiously. Any relaxation of IP norms could dilute the rights of Indian farmers to save, reuse, or trade seeds—practices fundamental not only to rural economies but to biodiversity and long-term food security.

A Deal Worth Making—But Not at Any Cost

Free trade is not free. It is shaped, structured, and ultimately driven by the strategic imperatives of negotiating partners. The United States, under successive administrations, has treated trade less as a vehicle of mutual growth and more as a lever of policy power. India must approach the negotiating table with this in mind.

Safeguard clauses for sensitive sectors, quantitative restrictions, non-tariff barriers in select categories, and a clear exclusion list for IP enforcement on farm inputs should be pre-conditions—not negotiation variables.

Moreover, platforms like Tradologie.com, which are at the forefront of digitising agri-trade and providing price discovery without intermediary distortion, stand as quiet, yet meaningful examples of how Indian exporters are beginning to professionalise market access. As India expands its global footprint in agri-exports, it must not lose control of its policy levers.

Final Word

The future of Indo–US agricultural trade doesn’t rest on tariff parity—it hinges on negotiating maturity. India must not conflate political goodwill with strategic alignment. What is at stake is more than an agreement—it’s the architecture of rural livelihoods, the sovereignty of our food systems, and the long-term direction of India’s agricultural economy.
In matters of trade, especially in agriculture, the margin of error is thin. And the margin of survival for Indian farmers, even thinner.