(Opportunities, Fears, and the Search for Balance)
The proposed bilateral trade agreement (2026) between India and the United States has emerged at a time when India, on the one hand, is moving towards expanding its participation in the global economy, while on the other hand, it faces the essential challenge of protecting its agriculture-based socio-economic structure. While the interim framework announced in February 2026 has opened new opportunities for Indian exporters in the US market, the potential import of cheap US agricultural products has created a sense of anxiety and insecurity among millions of farmers in the country. In this context, the question becomes extremely relevant: whether this agreement will establish India as a strong global agricultural exporter or will it cause economic crisis for small and marginal farmers.
India-US trade relations have historically been strategic and multifaceted. India has achieved a surplus in agricultural trade between the two countries in recent years, indicating the potential for global competitiveness of Indian agricultural products. The proposed agreement, under which the US would reduce or eliminate tariffs on Indian products—such as spices, tea, coffee, cashews, mangoes, papayas, and processed foods—could boost Indian exports. This would not only increase foreign exchange earnings but also boost value addition and processing industries in the agricultural sector.
But the other side of this agreement is far more complex and sensitive. The United States provides extensive subsidies to its farmers, making its agricultural products highly competitive in the international market. If such products—such as DDGS, soybean oil, and sorghum—enter the Indian market on a large scale, domestic farmers could suffer serious price competition. This could lead to a decline in agricultural prices, creating even more challenges for farmers already struggling with income stress.
India’s agricultural structure is largely based on small and marginal farmers, who constitute approximately 86% of the total. These farmers sustain their livelihoods amid challenges such as limited resources, volatile markets, and climate change. Policies such as the Minimum Support Price (MSP) provide a safety net for these farmers, but its reach is limited and does not benefit all crops and regions equally. If cheap imports increase in the domestic market, the effectiveness of the MSP could be weakened and farmers’ incomes could be adversely affected.
Another important concern relates to biosafety and genetically modified (GM) crops. The United States is a major producer and exporter of GM crops, while India still maintains a cautious approach to the subject. India may face pressure to reduce non-tariff barriers under trade agreements, potentially increasing the import of GM products. This situation could pose long-term risks to the country’s biodiversity, traditional agricultural practices, and food security.
Additionally, sensitive sectors such as dairy, poultry, and oilseeds could be affected by this agreement. India’s dairy sector is not only a global leader but also supports the livelihoods of millions of rural families. If American dairy products enter the Indian market, local producers will face competition. Similarly, the oilseeds sector, in which India is striving for self-sufficiency, could be affected by cheap imports, hindering the promotion of domestic production.
Along with these economic challenges, the social and strategic dimensions of this agreement are also important. Potential income losses and competition in the agricultural sector could adversely impact rural employment, exacerbating social inequality and regional disparities. Strategically, this agreement symbolizes growing cooperation between India and the United States, which is also linked to the broader perspective of the Quad and the balance of power in the Indo-Pacific. Therefore, it is not practical for India to reject this agreement outright; rather, it is necessary to adopt a balanced approach.
In this context, the biggest challenge facing India is how to protect its agricultural interests while taking advantage of global economic opportunities. This requires a multi-pronged strategy. First, trade protection measures—such as quantity limits (TRQs), minimum import prices (MIPs), and special safeguard measures (SSMs)—should be effectively utilized to protect the domestic market from sudden surges in imports.
Second, structural reforms are necessary to strengthen the domestic agricultural sector. This includes promoting Farmer Producer Organizations (FPOs), strengthening the supply chain, and encouraging processing and value addition. This will increase the competitiveness of Indian products and enable farmers to obtain better prices.
Third, an export-oriented agricultural policy should be strengthened. India has immense potential to capture global markets in spices, organic products, horticultural crops, and traditional food products. If attention is paid to quality standards, branding, and logistics in these sectors, India can not only maintain but also strengthen its trade balance.
Fourth, it is essential to adopt a clear and strict policy regarding biosafety and quality standards, so that the country’s food security and environmental balance are not compromised. Additionally, a balance must be struck between traditional knowledge and modern science while embracing technological innovations.
Ultimately, this agreement is not just an economic document, but a crucial step in shaping India’s development journey. Balancing its inherent opportunities and risks will be key to its success. India must adopt a “nation first” approach and develop a strategy that reconciles farmer security, food sovereignty, and global competitiveness.
If India succeeds in striking this balance through smart and sensitive policy-making, this agreement will not only become a vehicle for economic progress but will also pave the way for sustainable prosperity for crores of farmers in the country.
