Food & Climate
After imposing a 25% tariff on goods imported from New Delhi, the government reiterated its assurances that Indian agricultural products would not be on the negotiating table with the US administration led by Donald Trump, which is demanding that its markets be opened wide to Washington’s agricultural products.
India maintains its stance on making any compromise on agricultural and dairy products as trade talks with the US resume on August 25.
The government made it clear that farm goods, dairy, genetically modified food, beef and animal feed with meat are completely off the table.
“We are engaged with American officials and securing our national interest is our primary objective. The government is not going to come under pressure on areas that concern farmers and small businesses,” a government official said, according to a report seen by “Food & Climate” platform.
Agriculture, with its allied sectors, is unquestionably the largest livelihood provider in India, more so in the vast rural areas. It also contributes a significant figure to the Gross Domestic Product (GDP). Sustainable agriculture, in terms of food security, rural employment, and environmentally sustainable technologies such as soil conservation, sustainable natural resource management and biodiversity protection, are essential for holistic rural development.
Protecting Indian agricultural products
India vowed on Thursday to protect its labour-intensive agriculture sector, a central sticking point in bogged-down trade talks with the U.S., as Washington imposed 25% tariffs.
The rate went into effect from Friday and single out India for harsher trade conditions than its major peers, potentially damaging the economy of a strategic U.S. partner in Asia seen as a counterbalance to Chinese influence.
Though negotiations are continuing, they have hit a wall due to the United States’ insistence that India open its agricultural markets.
New Delhi has long shielded the sector, which – with over 40% of the workforce engaged in farming activities – constitutes the most influential voting bloc in the world’s most populous nation.
“The government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and (medium and small businesses),” India’s trade minister Piyush Goyal said in a statement in the parliament.
U.S. Treasury Secretary Scott Bessent said in a CNBC interview on Thursday that the U.S. trade team was frustrated with India, adding that the future of trade deal between the two nations was now up to India.
Membership in the BRICS
U.S. President Donald Trump had said on Wednesday that, in addition to the 25% tariff on imports from India, the country would face an unspecified penalty for its dealings with Russia and its membership in the BRICS grouping of nations.
“I don’t care what India does with Russia,” Trump wrote in a Truth Social post on Thursday. “They can take their dead economies down together, for all I care.”
The government’s failure to clinch an agreement with Trump, even as other major world economies like the European Union, Japan and South Korea have struck deals in recent days, sparked anger among India’s political opposition.
“The government has destroyed our economic policy, has destroyed our defence policy, has destroyed our foreign policy,” opposition leader Rahul Gandhi told reporters on Thursday.
Economists warned the steep tariff could hurt India’s manufacturing ambitions and trim up to 40 basis points off economic growth in the financial year to March 2026. Some doubted whether further negotiations would lead to improved conditions.
“While further trade talks may bring the tariff rate down, it appears unlikely that India will secure a significantly better outcome than its eastern neighbors,” said Priyanka Kishore, an economist at Asia Decoded, according to “Reuters”.
Days after US President Donald Trump announced that a tariff of 25%, plus an unspecified penalty because of energy imports from Russia, would be imposed on Indian exports, Prime Minister Narendra Modi has said the world economy is going through a period of uncertainty and made a push for ‘swadeshi’ (made in India) products.
Addressing a rally in his constituency Varanasi on Saturday, PM Modi said India has to focus on its economic priorities and every citizen should resolve to buy ‘swadeshi’, according to “Times of India”.