Amid India agri standoff, US gains access to politically sensitive rice market in Japan

Indian Express

23-07-2025

Signalling a resolute push on agriculture sector negotiations, US President Donald Trump on Wednesday announced a trade deal with Japan that includes market access for American agricultural products, including politically sensitive items such as rice. Under the deal, Japan has agreed to impose 15 per cent reciprocal tariffs, compared to the 25 per cent the US had threatened earlier this week.
This comes just days after India concluded an extended round of talks but failed to sign a deal, mainly due to differences over market access for agricultural products. The Japan agreement is significant as New Delhi too remains particularly sensitive over staple food items such as wheat and rice.
As in India, rice is an economically important and politically sensitive commodity in Japan — so much so that when Japan's farm minister joked he never had to buy rice because his supporters gave him 'plenty' as gifts, he was ultimately forced to resign, the BBC reported.
Japan is currently facing a rare cost of living crisis, which has affected rice prices. In 2025, prices have more than doubled compared to the previous year. The ruling coalition, led by Japanese Prime Minister Shigeru Ishiba, also suffered a defeat in the upper house elections amid widespread discontent over the cost of living.
'We just completed a massive Deal with Japan, perhaps the largest Deal ever made. Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits. This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it,' Trump said in a social media post.
'Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15 per cent. This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan. Thank you for your attention to this matter,' Trump added.
While agriculture remains a contentious issue in US trade negotiations, India's reliance on agriculture remains critically high. However, Western nations, including the US, have criticised India for providing excessive support to rice farmers. Although New Delhi has resisted pressure to reform its farm policies, it has also questioned the methodology used to calculate subsidies at the WTO.
Notably, India is the world's largest rice exporter. When India banned rice exports in July 2023, global prices rose by up to 32 per cent in key rice-importing countries. The ban was lifted last year following a rise in domestic inventories.
Meanwhile, the Indian Coordination Committee of Farmers Movements (ICCFM) — a network of farmers' organisations across 11 states including Uttar Pradesh, Haryana, Punjab, Karnataka, Tamil Nadu and Maharashtra — has urged the government to exclude all aspects of agriculture from the proposed trade deal with the US in order to safeguard Indian farmers' interests.
The ICCFM highlighted the risks to Indian farmers, stating that the US government is one of the world's largest providers of agricultural subsidies. The 2024 US Farm Bill has allocated a staggering $1.5 trillion towards farm support.
Such extensive subsidies not only restrict agricultural imports into the US but also allow American products to enter export markets at artificially low prices, the farmers' group said. Permitting heavily subsidised US imports into India, the ICCFM argued, would undermine India's longstanding position at the World Trade Organization (WTO) against such subsidies.
Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More