Niti Aayog withdraws paper on GM crop imports, signals govt's hard line on biosafety
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The Niti Aayog has withdrawn a working paper that proposed allowing imports of genetically modified (GM) soybean and corn from the United States, signalling the government's firm position against opening India's market to transgenic food products over biosafety concerns, as per TOI.The move comes despite US pressure in trade talks to ease what it sees as a non-tariff barrier, and despite Niti Aayog's own assessment that such imports could be allowed without harming domestic production.The paper, Promoting India-US agricultural trade under the new US trade regime, was released in May and co-authored by Ramesh Chand, a Niti Aayog member, and senior adviser Raka Saxena. It suggested that GM corn could be imported for ethanol blending and for by-products such as Distiller's Dried Grains with Solubles. 'US corn is cheaper and can be used to meet India's biofuel targets without disrupting local food and feed markets,' the authors wrote.Although the paper carried a disclaimer that the views were personal, its removal from the think tank's website reflects the government's reluctance to shift policy on GM food crops.At present, India permits commercial cultivation of only one GM crop — transgenic cotton, which is a non-food commodity. The government's position aligns with the Swadeshi Jagaran Manch (SJM), an affiliate of the Rashtriya Swayamsevak Sangh, which has consistently opposed both the cultivation and import of GM food products. The SJM has, in the past, found common cause with several left-leaning farm groups on this issue.The withdrawn paper had also suggested a 'dual-track' approach to agricultural trade negotiations with the US, pushing for selective imports of non-sensitive items that do not compete with local production, such as almonds, pistachios, and walnuts.India enjoys a surplus in agricultural trade with the US, a gap that has widened over the years. Between 2004 and 2024, India's farm exports to the US grew nearly fivefold, from $1.18 billion to $5.75 billion. Imports from the US rose faster, from $291 million to $2.22 billion over the same period.
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Indian Express
28 minutes ago
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In the same period, exports to the US rose from $645 million to $1,045 million — a 62% jump. For manufacturers who had only recently begun gaining a foothold in the US market, the move has come as a significant setback. 'There will definitely be an impact. We only have three US-based customers, as most of Agra's exports have traditionally gone to Europe. But the US was a major market we were trying to enter. It's a huge consumer base, and any success there would have changed the scale of our business. This is going to slow that push down,' said Sushant Dhapodkar of Tej International Pvt Ltd. Agra is one of India's largest footwear manufacturing hubs, alongside Kolkata, Kanpur and Chennai. The city has around 10,000 micro-units apart from 150 small-, 30 medium-, and around 15 large-scale industries. Many use leather imported from Turkey, which takes 45–50 days to arrive via road, along with Indian leather sourced mainly from Kanpur and Chennai, and some from Jalandhar. While Europe remains the mainstay for Agra's leather shoe exporters, the US market, the largest consumer base in the world — accounting for 24% of global consumption despite just 4% of the population — has been developing fast. In the last quarter alone, nearly half of Agra's export business, worth about $594 million, went to the US. The growth was so sharp that many manufacturers had invested heavily in expanding production capacity. 'Those who were earlier working on six assembly lines are now running 14,' said Puran Dawar, chairman of the Development Council for Footwear and Leather Industry and president of the Agra Footwear Manufacturers and Exporters Chamber. 'We ourselves had set up a unit bigger than our existing one to tap into the US market. That's definitely out of the question now.' The tariff announcement has also come at the peak of production for autumn and winter collections — the busiest for Agra's export factories. 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'Now with the initial 25%, it's going to be a disaster unless Trump goes back to the original tariff,' he said. 'This won't just be a problem for India, but for the US as well… the higher the duty, the more expensive their product will be. In countries where lower tariffs are imposed, they will have the advantage, and we wouldn't be able to compete with them,' said Ahmed. He also highlighted the potential impact back home. 'If orders aren't placed, factories will be without work. And if factories are without work, workers will be without work. This industry is labour-intensive, so unemployment could run into millions if this continues. And I'm not just talking about manufacturing — textiles, tools, every industry linked to this process will take a hit,' he said. Manufacturers said the setback is particularly bitter because of the efforts they made to break into the US market. 'It's a setback to our plans to double or triple exports to the US,' Ahmed said. 'The government increases targets every year, and the American market has the potential to match our exports to Europe. Now all that planning is on hold.' Others, like Dawar, believe the hike is a 'pressure tactic' and will eventually be rolled back. 'The government is in touch with us to see how they can help. We were called to meet Commerce Minister Piyush Goyal last week to discuss relief. One idea discussed was that the government could bear a part of the hike, and the remaining could be between the manufacturer and the US importer.' The current uncertainty, meanwhile, is already triggering ripple effects beyond Agra. Naseem Khan, a Kanpur tannery owner whose leather is supplied to manufacturers linked to US exports, said clients have begun cancelling or freezing orders. 'Whatever the stage of production, they're saying stop immediately. Even though we don't directly export to the US, we are deeply connected; the leather we produce is approved by those who manufacture finished goods for the US,' Khan said. Meanwhile, exporters are brainstorming alternatives. Russia, once a major market for Agra, is being considered for revival. Others are looking inward to India's growing middle class — a customer base whose purchasing power has risen in recent years. Until now, much of the footwear sold domestically was made locally from scraps and leftovers of the export process. But with international orders in limbo, manufacturers are weighing whether to redirect their best designs and full-scale production to the home turf. Chairman, Council for Leather Export, Rajendra Kumar Jalan said, 'Currently, the dispatches have come to a standstill. All US buyers and Indian manufacturers exporting finished goods to the US have put their orders on pause because of the 50% tax. When the tax was raised to 25%, there was still some hope — we were still on par with competing nations like Bangladesh, Indonesia, Vietnam, and, to some extent, China. But now, we are completely out of the picture. China, in fact, is gaining an advantage because the additional Russian oil tariffs do not apply to them, and they also enjoy a 90-day moratorium.' 'That being said, the US purchases from us are in large volumes, and for these bulk buyers, getting an alternative source of production for these huge orders, and that too in a short period, will be extremely difficult,' said Jalan 'At present, the reaction is one of panic. But we remain hopeful of finding alternative markets. There will be competition from other leather manufacturing nations, but our focus will be on countries where India has signed or is about to sign an FTA — countries such as Chile, Peru, and some European nations,' he said. — With inputs from Nirbhay Thakur
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