India Must Protect Its Farm Sector From U.S. Inroads

The U.S. and India are nearing a deal to reduce tariffs, but one sticking point remains ahead of President Trump’s July 9 deadline: agriculture—particularly dairy, Jenny McCall reported for Yahoo Finance.

The average Indian farm covers just 1.08 hectares, compared to 187 hectares in the U.S.

Reuters earlier explained why agricultural imports are a sensitive issue in India: “Agriculture and its allied sectors contribute just 16% to India’s $3.9 trillion economy but support nearly half of the country’s 1.4 billion population.

As farmers remain the most powerful voting bloc, Prime Minister Narendra Modi’s government was forced into a rare retreat four years ago when it tried to push through controversial farm laws.”

Cheaper imports from the U.S. threaten to drive down local prices, giving opposition parties new grounds to criticize the government. New Delhi has traditionally excluded agriculture from Free Trade Agreements (FTAs).

Granting market access to the U.S. could compel India to extend similar concessions to other trading partners.

The average Indian farm covers just 1.08 hectares, compared to 187 hectares in the U.S. In dairy, Indian farmers typically keep only two to three animals per household, compared to hundreds in the U.S.