India remains cautious over agriculture, dairy in trade talks with US

Resistance from its farmers to US push for greater market access a major sticking point

- Nirmala Ganapathy

NEW DELHI - In the central Indian state of Madhya Pradesh, soya bean farmer Harnam Singh Lodhi lamented that he has enough difficulties without having to worry about competition from American farmers.

"This year, non-stop rain after sowing has hurt the crop," said Mr Lodhi, who fears 70 per cent of his soya bean crop has been washed out and ruined.

"I am also worried about getting good rates when the crop is harvested in October," added the farmer, who has an 8.1ha farm in the biggest soya bean producing state in India, on which he also cultivates wheat.

"So how can I, on top of all that, compete with American soya bean farmers?"

Soya farmers like Mr Lodhi are contending with a market glut due to a good November harvest, which has pushed average prices down by about 10 per cent since 2024 to around 4,000 rupees (S$60) for 100kg.

Prices could fall further if the United States gets its way.

Soya - along with dairy, wheat, rice and apples - is among the American produce Washington wants India to ease import restrictions on. The US is the world's second-largest producer of soya beans, while India is ranked fifth.

The South Asian country is looking to reduce a 26 per cent "reciprocal" tariff imposed by the Trump administration.

But resistance from Indian farmers to the US push for greater market access in agriculture and dairy has been a major sticking point in the government's tariff negotiations.

India's Finance Minister Nirmala Sitharaman said in a July interview with The Financial Express that these sectors "have been among the very big red lines, where a high degree of caution has been exercised".

Around 60 per cent of India's 1.4 billion people are engaged directly or indirectly in agriculture, a sector that accounts for about 18 per cent of the annual economic output of the world's fourth-largest economy by nominal gross domestic product. Collectively, farmers wield enormous political clout.