Farm, dairy goods should be kept out of India-US trade deal talks, says Swadeshi Jagran Manch

Donald Trump's announcement on Friday that India agreed to bring tariffs "way down" was largely viewed by New Delhi as premature

India should keep dairy and farm products out of its trade deal negotiations with the United States, RSS-affiliated national co-convener Ashwani Mahajan has said.

The comments come at a time when reports have suggested that agricultural goods could be a key area of the ongoing discussions between India and the US for a trade deal, with both countries looking to enhance market access by reducing tariffs and removing non-tariff barriers.

“If history is any guide, we have been careful about agriculture and dairy in our trade negotiations. This stand is not going to be diluted in any case. I think, while negotiating with the US, we may tweak tariffs on some industrial products but so far as agriculture is concerned, especially where livelihood of farmers is involved, the government has been protecting their interest, and that should continue,” Mahajan told Moneycontrol.

The Swadeshi Jagran Manch is affiliated to the Rashtriya Swayamsewak Sangh, the ideological parent of the BJP.

In 2021, India dropped out of the Regional Comprehensive Economic Partnership (RCEP) involving the Association of Southeast Asian Nations (ASEAN), citing its negative effects on farmers and the dairy sector.

During Prime Minister Narendra Modi’s recent visit to the US, both sides agreed to work together to increase trade in agricultural goods.

India and the US also set a new goal, “Mission 500”, aiming to more than double total bilateral trade to $500 billion by 2030 and to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall 2025.

“The US gives a lot of subsidies to their farmers, and US prices are always lower than global prices, they give subsidy in such a way so nobody can sell in their market, because their domestic prices are always lower. There is no way we can access US market even if they lower tariffs cos their prices are lower,” Mahajan said.

Negotiating on farm products is tricky for India and the US since Washington has often questioned New Delhi’s at the World Trade Organization over subsidies to its farmers.

“India can also gain market access due to steeper import duties on others including China even beyond the proposed trade deal. The US seems to be keen to increase investments in India, so we should look at it as an opportunity to take forward the agenda of Atmanirbhar Bharat,” Mahajan said.

US President Donald Trump’s reciprocal tariff plan could significantly impact Indian farm exports, especially outbound shipments of shrimp, dairy, and processed foods.

According to an analysis by Global Trade Research Initiative (GTRI), Indian farm exports to the US face a 5.3-percent tariff, whereas US farm exports to India face a much higher 37.7-percent levy, creating a gap of 32.4 percent.

GTRI warned that a free trade agreement with US could force India to make difficult concessions such as reducing agricultural subsidies.

While US’ exports in agriculture, meat and processed food amounted to $1.94 billion, its imports from India in this category stood at $6.04 billion in the calendar year 2024.

The US is set to impose higher tariffs from April 2 on countries that levy steep duties on American goods under its Fair and Reciprocal Plan.