India and the United States continue intricate negotiations over a Bilateral Trade Agreement involving agricultural products, with apples, corn, and soybeans emerging as contentious points. The ongoing dialogue could delay the agreement beyond the anticipated July 8 deadline.
An Indian government official clarified, "The U.S. is pushing so hard for market access for agricultural products. But India has to protect the interests of a much larger population; it is more of a livelihood issue than a commercial issue for us," according to www.moneycontrol.com.
The U.S is eager for tariff reductions on apple imports, while India considers allowing limited concessions on a quota basis to safeguard its domestic apple growers. This proposal faces challenges, particularly concerning apple producers in Himachal Pradesh and Jammu & Kashmir. "If there is a trade deal, and there is an advantage given to U.S. apples, then some of the imports from other trading partners will reduce," the official expressed. "This is why talks are dragging on, and there is so much back and forth."
U.S. apples confront a 50 per cent tariff in India, leading to imports valued at $37.9 million, which equates to 9 per cent of the nation's apple imports in 2024.
The negotiations also address genetically-modified product imports, a sensitive subject in India. The emphasis is on corn and soybeans, attributed to U.S. producers achieving high yields through GM variants. Indian officials express concerns regarding domestic competition. "For U.S. products like corn or soybean, the dimension of genetically modified organism (GMO) comes in, which itself is a complex issue," another official noted.
Niti Aayog, an Indian policy think tank, proposes allowing some GM imports under stringent controls. Their report suggested concessions on soybean oil imports to assist in balancing trade and maintaining domestic production. Additionally, they advocate for permitting U.S. corn for ethanol blending while ensuring the exclusion of GM materials from local food chains.
Challenges in regulatory enforcement and fragmented market chains persist, as noted by the Global Trade Research Initiative, stating potential risks of GM products infiltrating domestic agriculture. "Once GM products enter the country, there is a high risk they will leak into domestic agriculture," Ajay Srivastava remarked.
Efforts to reduce tariffs on select U.S. products like almonds and walnuts continue, reflecting India's cautious stance given its substantial agricultural workforce, contrasting with the U.S.'s lower dependence on agriculture.
Source: Money Control
