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Indian Express
3 days ago
- Business
- Indian Express
Lower duty on edible oils, nuts; target growth in spice, rice in US deal: Niti Aayog
India should offer concessions on agricultural products from US such as edible oils and nuts where domestic supply gaps exist, and explore duty concessions to boost high-performing exports — including shrimp, fish, spices, rice, tea, coffee, and rubber — in the US market during the Bilateral Trade Agreement (BTA) negotiations, a Niti Aayog working paper has argued. The need for calibrated negotiations on agricultural trade relations between India and the US arises as India has traditionally maintained relatively high tariffs on politically sensitive agricultural sectors to protect farmers, but the US, under President Donald Trump, has been aggressively pushing for greater market access and lower tariffs, posing a challenge for developing countries such as India. The working paper dated May said India can offer some concessions to the US in the 'import of soybean oil' to meet US demands to reduce the trade imbalance, without harming domestic production, as India is the largest importer of edible oil in the world and the US has a huge export surplus of soybean. 'Import soybean seed from US 'We should also explore the option of importing soybean seed and using it for extracting oil in the coastal areas, then selling the oil in the domestic market and exporting the meal, for which there is adequate overseas demand. This will avoid genetically modified (GM) feed entering the Indian market,' the paper, authored by Senior Adviser at NITI Aayog, Raka Saxena, and Member of NITI Aayog, Ramesh Chand, said. 'Similarly, corn may be imported for ethanol blending, and its by-products — like Distiller's Dried Grains with Solubles (DDGS) — can be entirely exported to avoid GM feed in the country. US corn is cheaper and can be used to meet India's biofuel targets without disrupting local food and feed markets,' the paper said. Notably, soybeans and corn are among the US top exports to China, where a trade war may affect agricultural trade between the two countries. According to a Reuters report, US soybean exports may drop 20 per cent and prices could plunge if the United States and China fail to resolve their trade dispute, limiting US soybeans from accessing their largest market. Ease US apple imports 'Indian producers already enjoy supply advantages in commodities like rice and pepper. High tariffs on such products by India, which are regularly exported by the country, can be easily lowered or even removed in the bilateral trade accord. Such tariffs are not relevant for trade with countries like the US,' the paper said. The Niti Aayog paper said India can consider lower tariffs on agricultural commodities where either domestic production is small or imports do not compete with domestic production due to different quality grades and seasons. 'For example, US apples sell at a premium price in Indian retail markets due to different quality, long shelf life, and off-season availability.' Boost exports of fish, spices & coffee 'India should negotiate more access to the US market for high-performing exports like shrimp, fish, spices, rice, tea, coffee, and rubber. India earns approximately $5.75 billion annually from agri-exports to the US. Expanding this through duty waivers or TRQs should be part of trade talks,' the paper said. The authors said that US is expected to remain a big market for export of surplus food from India and all efforts need to be made to keep favorable environment for export to US. 'This should include strategic opening for US imports into India to achieve larger gains in exports. The ongoing negotiations between the two countries for a bilateral trade accord seem to be the best option for resetting long term trade relationships'. 'Export basket should emphasize both, traditional products like fishery and rice sold in large volume and a large number of high value products, differentiated products, ethnic products, attribute-based products, health foods, processed food etc. which are individually small but cumulatively quite large,' the paper said. In the last 10 years, India's agricultural exports to the US grew nearly fivefold, from $1.18 billion to $5.75 billion and the share of the US in India's total agricultural exports saw a slight decline, dropping from 11.5 per cent in 2004 to 9.8 per cent in 2024. Meanwhile, India's agricultural imports from the US increased even faster, rising from $291 million in 2004 to $2,217.9 million in 2024. 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
Time of India
3 days ago
- Business
- Time of India
India should adopt a dual-track approach to protect its agri exports to US: NITI Aayog working paper
India should adopt a dual approach and offer tariff concessions on certain agricultural commodities to the US while also undertaking medium-term structural reforms to improve the global competitiveness of its farm sector amid 'reciprocal tariff' to keep a favorable environment for exports to the US, a NITI Aayog working paper said. Written by NITI Aayog senior advisor Raka Saxena and member Ramesh Chand, the paper on ' Promoting India-US Agricultural Trade Under the New US Trade Regime', suggests India should consider selectively reducing high tariffs on non-sensitive imports like US apples in the short-term. 'India should negotiate non-tariff safeguards on vulnerable segments such as poultry and can also strategically offer concessions where domestic supply gaps exist, such as in edible oils and nuts,' it said. Talking about the medium-term structural reforms that India should undertake to improve the global competitiveness of its farm sector, the paper said India should bridge the productivity gap by embracing appropriate technologies, market reforms, private sector participation, improvement in logistics and development of competitive value chains. India's exports to the US include traditional items such as frozen shrimp, basmati rice, spices along with processed cereals, and other value-added products while its imports from the US remain concentrated in high-value commodities such as almonds, pistachios, and walnuts. According to the paper, the ongoing negotiations between the two countries for a bilateral trade accord seem to be the best option for resetting the long term trade relationship. 'Given that the US is India's largest trading partner and a key destination for Indian agri-exports, India must prepare a strategic response that protects domestic producers and promote overall domestic interests without escalating trade conflicts,' it argued. The report outlines seven strategic interventions that could help in maintaining India-US agricultural trade relations. This includes building structural competitiveness, strategic import substitution in case of edible oil and corn, protection of sensitive sectors like poultry and dairy through non-tariff measures, marketing reforms and export facilitation, tariff adjustments on US apples, almonds and pistachios and seeking reciprocal market access for high-performing exports through duty waivers. Besides, it has proposed setting up of an Agri Trade Intelligence Cell to systematically monitor global supply situation, global trade trends, import surges, and price volatility.
Mint
3 days ago
- Business
- Mint
Pragmatic tariff adjustments with US can secure India's farm exports: NITI paper
New Delhi: India should grant more market access to American products that do not hurt Indian farmers—including apples, almonds and pistachios—for a mutually beneficial bilateral trading arrangement, according to a working paper by NITI Aayog. In turn, India could benefit from greater long-term market access for its shrimp, fish, rice, tea, coffee and rubber, the paper said as the two countries tried to wrap up a bilateral trade agreement. The paper supports a 'give and take' approach that will allow the US to lower its trade deficit with India, while also helping India to secure its farm exports. The paper, co-authored by member Ramesh Chand and senior advisor Raka Saxena, also suggests that India introduce market reforms in the farm sector and work with states in order to improve competitiveness of India's agriculture exports. Also read: Wheat procurement hits 29.7 million tonnes in 2025–26, highest in four years amid bumper crop 'India must pursue a pragmatic mix of tariff adjustments, strategic import liberalization and long-term competitiveness to safeguard its farm sector while preserving strong trade ties with the United States. With calibrated give-and-take, India can prevent large-scale disruption, avoid trade conflict and emerge as a more competitive and resilient agri-export economy," said the latest working paper from the federal policy think tank. It clarifies that authors' views are personal. India can consider lower tariffs on agricultural commodities where either domestic production is small or import does not compete with domestic production because of different quality grades and seasons, the report said, citing examples of US apples which sell at a premium price in India and products like almonds and pistachios, the demand for which is met through imports. Apples from the US now attract 50% import duty in India, while pistachios and walnuts attract 30%, the paper pointed out. The authors explained that India, which accounts for over 40% of US imports of frozen shrimp and prawn, its largest source of import, now faces a 26% tariff under the now-suspended reciprocal tariff plan, compared with the earlier zero-duty regime, potentially weakening India's price advantage if the tariffs are not averted. India is currently in trade talks with the US to avoid the tariffs announced on 2 April and suspended for three months to facilitate talks. Also read: India sets record grain production target of 354.64mt for 2025-26 Ecuador, with a lower share and lower unit value for the commodity per tonne, faces only a 10% tariff under the reciprocal tariffs, positioning it to gain from the shifting trade dynamics with the US, the report pointed out. 'As a leading supplier with over 40% market share, India stands to lose price competitiveness, especially against countries like Ecuador and Argentina, which now face only a 10% tariff. This shift could lead to reduced demand for Indian shrimp in the US unless exporters absorb part of the cost or reposition toward value-added or certified sustainable products," the report pointed out. Indonesia and Vietnam, however, stand to take a heavier hit from the reciprocal tariffs on shrimp at 32% and 46% respectively. The pause on reciprocal tariffs announced by the US has created a level playing field for now, but exporters are hoping for a permanent solution. 'We are confident that the negotiations between India and US for concluding a trade agreement would yield fruit quickly and allow import of shrimp into the US without any tariff barriers," said K.N. Raghavan, secretary general of the Seafood Exporters Association of India. Export of processed and value-added seafood has immense potential, Raghavan said, adding that more focus on this area with support from government will lead to higher exports. "We are confident that with support from government and related agencies, we will be able to double the present export turnover of $7-8 billion a year within the next five years," added Raghavan. The report said rice is the second-most important commodity exported by India to the US, commanding 27% share in its rice imports after Thailand, which controls more than half of all US import of rice. India exported rice worth $ 409 million to the US in 2024. India, now faces the threat of a 26% reciprocal tariff on rice, which would be an increase from the otherwise 0.6% tariff. This poses a moderate yet strategic challenge. India still retains a tariff advantage over Thailand, which faces a higher 36% rate. 'There is ample of scope as well as opportunity for semi-milled rice and basmati rice exports from India to US, if the trade deal is done keeping the interest of Indian farmers," said Satish Goel, president, All India Rice Exporters of India. Also read: India to revamp rice cultivation technique to save water, cut methane emissions Like exports, the composition of India's agricultural imports from the US has also undergone considerable changes during the last two decades. Edible fruits and nuts have emerged as a dominant item of agricultural imports followed by cotton and beverages and spirits. These three categories constitute 75% of total agricultural imports from US into India, the report said. By turning current challenges into reform opportunities, India can position itself as a global food power in the coming decades, the report said.
