6 min readFeb 16, 2026 11:58 AM IST
First published on: Feb 16, 2026 at 07:22 AM IST
Let me state at the very outset that anyone who thinks exports are always good but imports are bad does not understand trade policies. There has been a lot of noise and commotion in Parliament over the India-US trade deal. The opposition parties, led by the Leader of Opposition, feel that the deal is a total surrender. But the government benches projected it as the best deal under the given circumstances. The truth may be somewhere in between. There is always give-and-take in any trade deal. This one is no different.
India had to give in to the US demand that it buy more energy, aircraft, and high-tech equipment. We had to agree to show our “intent” or “commitment” to buy $500 billion worth of goods from the US over the next five years. That looks huge as our current goods imports from the US are well under $50 billion a year. But in return, India got the US to slash its import tariffs on Indian goods to 18 per cent, which is very much in line with our competitors in South and Southeast Asia, and almost half of what is being imposed on China. This, the government says, is the biggest victory and opens doors for significantly higher exports from India to the largest economy in the world — the US.
There are also strong apprehensions expressed by opposition parties as well as by some farmer groups on the agricultural segment of the deal. Let me dwell on that and try to remove some misgivings, although I know that those who are bent to oppose will always oppose, no matter what the empirical evidence suggests.
What are the fears on the agri-trade front? First, the US will flood the Indian market with its agri-produce and our farmers will be severely hurt. Second, it will throw its genetically modified (GM) crops or their derivatives like soya oil and dried distillers’ grains (DDGs) into our food system, which will put the health of millions of our citizens at risk. Third, farms in the US are very large, mechanised, and receive large subsidies — our small farmers cannot compete with them and will thus lose their livelihoods on a large scale. Let me discuss each of these fears, and how much truth there is to them.
In the calendar year 2024, India exported goods worth roughly $81 billion to the US and imported goods worth $43 billion, leading to a trade surplus of about $38 billion. Out of this, agri-exports were about $5.7 billion and imports roughly $2.1 billion, giving India an agri-trade surplus of $3.6 billion. In the trade deal, India has largely opened crops that are either not grown in the country or grown on very small areas, like tree nuts and berries. Almonds have already been coming to India at low duty of about 10 percent in ad-valorem terms (Rs 42/kg). Walnuts, pistachios, pecans, cranberries and blueberries are likely to attract similar duty (10 to 15 per cent) and there will be some imports of those. But they are not going to impact our farmers much. Concerns are raised about apples, and their duties are likely to come down from 50 per cent to 25 per cent or so, although more will be known only when the fine print is out. My understanding is that lowered duties will be accompanied by import quotas, safeguarding our farmers adequately.
The other concern when it comes to agri-imports is that of GM crops or their derivatives like soya oil and DDGs. It may be noted that India has not allowed direct import of GM corn or GM soya, which are living modified organisms, and which can be seeded to grow GM crops in India. But soya oil or DDGs, which are permitted to be imported, actually have been coming for quite some time. It may be noted that when GM soya or GM corn are processed into oil or DDGs, traces of GM are either absent or negligible, but more importantly, they are no longer living modified organisms. They cannot be germinated, and there is no adverse health impact either on poultry, cattle or human beings as per the US Food and Drug Administration. Some scientists and many NGOs have reservations on this, but the fact remains that GM crops are being grown in 76 countries over 200 million hectares and these crops range from papaya and brinjal to corn, soyabean, etc. And the people of those countries are not dying by consuming these GM crops.
The third point is about competition: Whether our small farmers can compete with large US farmers, who are subsidised. It may be noted that our small farmers have done reasonably well in global competition. Our overall agri-exports to the world were about $52 billion and imports about $37 billion in 2024. The US is a net importer of agri-products ($59 billion in 2024). We also give a lot of input subsidies to our farmers, be it in the form of fertiliser subsidy, credit subsidy or insurance premium subsidy, and even direct income support in the form of PM-KISAN. If we want to retain the competitive strength of our smallholders, we need to invest much more in agri-R&D. It may be worth noting that US GM corn and soyabean productivity is three times higher than in India. It is better that we make smart choices in our domestic expenditures related to agriculture.
Overall, I find the trade deal a smart move by India, at least in the agri-segment. It has avoided major concerns, and opened the doors with caution and with quota systems. Farmers need not worry much today. However, more revelations may come by March-end.
Gulati is distinguished professor at ICRIER. Views are personal
