The United States and India have announced a temporary agreement for a trade deal aimed at reducing tariffs, improving energy relationships, and enhancing economic cooperation as both countries look to adjust global supply chains. India resisted U. S. proposals to open its agricultural market widely but agreed to lower trade barriers on some farm products, which has drawn criticism from farmers and opposition groups.
India plans to allow imports of distillers dried grains with solubles (DDGS) from the U. S., which could benefit the poultry sector by lowering feed costs but may negatively impact local oilseed processors and soybean farmers due to increased supply and lower demand for oilmeals. The growth of DDGS supplies might also hurt earnings for India’s ethanol producers.
Concerns have been raised about duty-free imports of soyoil from the U. S. However, this will occur under a tariff-rate quota, protecting local producers by ensuring that imports above a certain volume are taxed. Similarly, while allowing duty-free cotton imports from the U. S. could pressure domestic cotton prices, the impact will be limited as only specific types of cotton will be imported under a quota.
India imports a significant amount of apples annually, and although there will be concessional imports under the trade deal, measures are in place to protect Indian farmers. The growing consumption of dry fruits, which are not produced in large quantities domestically, is unlikely to harm local farmers due to similar protective measures.
Overall, Indian growers of tea, coffee, spices, and fruits will benefit as the U. S. has granted duty-free access for these products, and lowering rice import duties to 18% will support exporters.
With information from Reuters
