Trump Wants India to Buy U.S. Corn: Why It's Unlikely to Happen

In the ever-evolving trade conflict between the U.S. and India, one question remains at the forefront: Why won’t India purchase even a single bushel of American corn? U.S. Commerce Secretary Howard Lutnick recently questioned India's resistance to opening its agricultural market, specifically targeting its farm sector, which has long been protected by high tariffs and regulations. Let’s break down the complexities behind this question and explore why India is unlikely to bow to U.S. demands for agricultural imports.

The Agricultural Trade Tug-of-War: A Battle of Interests

The agricultural sector has become a critical focus in the escalating trade war between the U.S. and India. President Donald Trump has been vocal about his frustration with India’s trade policies, frequently accusing the country of being a “tariff king” and a “big abuser” of trade relations. As the U.S. and India prepare for a new wave of tariffs set to take effect on April 2, 2025, Lutnick has criticized India's market barriers and urged it to ease restrictions on agricultural imports, including corn, wheat, and cotton, with the aim of reducing the U.S.'s $45 billion trade deficit with India.

The U.S. has long eyed India's agricultural market, seeing it as an untapped opportunity. However, India's defense of its farm sector remains strong, citing reasons of food security, rural livelihoods, and protection for millions of small farmers. While the U.S. aims to export its surplus agricultural products to India, India's refusal to embrace such imports stems from deeper structural and economic reasons.

India’s Agricultural Success and Its Struggles

India's journey from a food-deficient nation to a food-surplus powerhouse has been nothing short of remarkable. In the mid-20th century, India relied heavily on food aid. However, a series of agricultural reforms, advancements in crop technology, and policy shifts helped India become self-sufficient in staple crops and a global leader in dairy production, now being the largest milk producer in the world. Additionally, India's horticulture, poultry, and aquaculture industries have expanded significantly, contributing to its agricultural exports.

Currently, India is the world’s eighth-largest agricultural exporter, shipping grains, fruits, and dairy products globally. Despite these achievements, India’s agricultural sector still faces significant challenges, including low productivity, underdeveloped infrastructure, and limited market access. The country's small-scale farming model—where farmers cultivate less than 1 hectare on average—makes it difficult to compete with larger, more mechanized farming operations like those in the U.S.

India’s agricultural sector employs nearly half of its workforce, but this only contributes about 15% to the country's GDP, a clear indication of the inefficiencies within the system. To put this into perspective, less than 2% of the U.S. population is engaged in farming, which plays a much smaller role in the nation's overall economy. This stark difference in agricultural productivity and reliance on farming significantly shapes India’s trade policies.

Why India Refuses to Open Its Agricultural Market

Despite its success in becoming self-sufficient, India continues to face challenges in its agricultural sector. Productivity remains low compared to global standards. According to the Global Trade Research Initiative (GTRI), India's average tariff on U.S. agricultural products is 37.7%, significantly higher than the 5.3% tariff India faces on its products in the U.S. India’s reluctance to lower these tariffs stems from a desire to protect its small farmers from the flooding of cheaper foreign goods that could undermine domestic agriculture.

India primarily exports agricultural products like rice, shrimp, honey, and black pepper, while the U.S. exports goods such as almonds, apples, and lentils. However, the U.S. now seeks to push for larger agricultural exports—such as corn, wheat, and cotton—in an effort to bridge the trade gap. According to trade expert Biswajit Dhar, the U.S. is no longer just interested in small-ticket exports; they are aiming for bigger and more profitable agricultural deals.

This shift comes at a time when the U.S. heavily subsidizes its agriculture sector, with some subsidies exceeding 100% of production costs, creating an uneven playing field that could devastate India’s smallholder farmers. The subsidies that U.S. farmers receive not only give them a competitive advantage but also add pressure to India's rural economy.

The Case for Protecting India’s Farmers

The underlying reason for India’s resistance to opening up its agricultural market is its commitment to protecting the livelihoods of its farmers. India's agriculture is rooted in subsistence farming, where millions of farmers rely on government support to maintain their livelihoods. This contrasts with the U.S., where farming is more commercial and heavily subsidized. The disparity between the two agricultural systems is significant, and India’s position is that trade agreements with the U.S. should not undermine its farmers or food security.

Former head of the Centre for WTO Studies, Abhijit Das, points out that India's agricultural system is focused on subsistence farming, with the primary concern being the welfare of millions of small-scale farmers. The U.S., on the other hand, views agriculture as a business, driven by the interests of agribusinesses. The balance between protecting local farmers and participating in global trade is a challenge India continues to navigate.

India’s agricultural sector is also dealing with its own internal issues. Farming has long been underfunded, receiving less than 6% of India's total investment. Infrastructure improvements, better machinery, and modern farming techniques are crucial to increasing productivity and competitiveness. In addition, India’s farmers often face challenges such as global price volatility and the effects of climate change, which complicate their ability to compete on the global stage.

Negotiating with the U.S.: A Delicate Balance

As the U.S. pushes for greater access to India’s agricultural market, India must balance its national interests with the pressure to engage in trade deals. Ajay Srivastava of GTRI argues that India must resist U.S. pressure to open its agriculture sector to foreign imports, warning that doing so would disrupt livelihoods and jeopardize food security. India's focus must remain on protecting its rural economy and ensuring its farmers' long-term sustainability.

In the long term, India needs to modernize its agricultural practices, focusing on improving yields and reducing inefficiencies. Experts believe that with the right investments in infrastructure and technology, India could potentially generate a surplus of 200 million metric tonnes of paddy, which could not only supply the global market but also help combat hunger worldwide.

However, until India makes these crucial reforms, the country’s best strategy is to buy time and engage in trade negotiations from a position of strength. Experts suggest that offering the U.S. cheaper imports of industrial goods in exchange for protection of its agricultural sector could be a viable compromise. In the end, the goal is to ensure that India’s agriculture remains stable, competitive, and protected from market disruptions.

Moving Forward: India’s Strategy

The path forward for India involves walking a fine line between trade cooperation with the U.S. and safeguarding its agriculture sector. By negotiating carefully and strategically, India can ensure that its farmers’ livelihoods are protected while engaging in mutually beneficial trade agreements with the U.S. As global trade dynamics shift, India's ability to protect its agricultural backbone while negotiating effectively with the U.S. will be crucial in determining the future of its rural economy.

In conclusion, India’s agricultural policies are deeply intertwined with its national interests, and as it navigates the complexities of global trade, it must remain firm in its commitment to protecting its farmers and food security. The ongoing trade negotiations with the U.S. will undoubtedly be a delicate dance, with both sides needing to find common ground without compromising their core values. Only time will tell how India plays its hand in this high-stakes trade battle.

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