India’s negotiators have taken a balanced approach in the interim trade agreement with the United States, particularly on agriculture and dairy, Ashok Gulati, Distinguished Professor at ICRIER, said on Saturday. “The Indian negotiators have played it pretty safe. And it’s a very balanced deal,” Gulati said in a conversation with Business Today Group Editor Siddharth Zarabi.
The US and India announced on Saturday that they have reached a framework for an interim trade agreement. As per the Agreement, India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
Gulati said that what emerges from the joint statement is a limited and carefully structured opening in agriculture. One of the key elements is distillers’ dried grains, a by-product of corn and soybean processing, which is expected to be used primarily as poultry feed.
“The DDGS (Distillers Dried Grains with Solubles) is likely to be fed to the poultry, whether it is corn or soybean. In that there could be a marginal impact on corn and soybean farmers. But it will be very helpful for the poultry industry and the dairy industry on that front,” he said.
Crucially, Gulati pointed out that the most politically sensitive issues – direct imports of genetically modified crops and dairy – have so far been kept out of the deal. “We have avoided the GM question because it is all crushed in form. So import of corn or soybean, which people were talking about, that’s not there in the list so far,” he said. “Dairy has not been mentioned at all in the joint statement.”
He added that while future inclusions cannot be ruled out, there is currently no indication that India has opened the door to direct imports of GM crops. “We still don’t know that among all other products, there is mention of many other products, whether it will come later or not – we don’t know. But we have not allowed direct import of GM crops from that angle.”
On tariff reductions, the economist said the concessions on tree nuts are unlikely to hurt Indian farmers because domestic production is limited. “Almost 90% of the almonds that we are consuming in the country are coming from the US. And if you take the product-specific tariff on that and then convert that into ad valorem it’s about 11% tariff,” he said. “On walnuts, we had 120. The finance bill says we’ll bring it to 100. I don’t understand that logic.”
He added that tariffs on walnuts, pistachios, pecans, cranberries, and blueberries are likely to settle in the 10–15% range. “That’s not going to impact our farmers very adversely. There is very little area and very little production that we have at home.”
Gulati also addressed a key line in the joint statement referring to India’s commitment to address ‘long-standing non-tariff barriers’ in food and agriculture trade – a phrase that has raised concerns in political and farming circles.
“Especially in the dairy sector, for example, we have a major concern that their cows are not vegetarian. Many of the cows are fed on some of the residues of the slaughter houses and all that. So whether that will be allowed or not, it’s a very sensitive issue.”
The second, he said, relates to genetically modified crops – a debate India has repeatedly postponed. “Remember that our GM crop, Atal Bihari Vajpayee in 2002 allowed BT cotton, and within 10 years, we went from 13 million bales to 39 million bales. It was a gene revolution,” Gulati said. “But then we messed up with some of the things. We have not allowed corn.”
“Corn GM in the US gives a productivity of 11 tons. Our productivity of corn is 3.5 tons,” the economist said. “We have to remember that the future of agriculture is going to be in gene editing.”
Invoking Prime Minister Atal Bihari Vajpayee, Gulati warned against allowing ideology to override science. “I’m reminded of Atalji’s famous line that if IT, information technology, is for India, BT biotechnology will be for Bharat. If we don’t pay heed to that, we’ll be left behind,” he said. “Our approach should be more science-based rather than ideology. This is what I read from this document.”
