What's the Indian Government Doing to Protect Farmers From Trump's Bullying?

Another August ends in our glorious Amrit Kaal with a reality check from US President Donald Trump. Most Indian origin imports into the US, as of August 27, are facing 50% tariffs, 25% of which are a “penalty” from Trump for buying Russian Oil. Meanwhile, Europe goes tariff free despite buying Russian oil and gas.

While our prime minister has assured the nation saying that “no matter how much pressure comes, we will keep increasing our strength to withstand it” and that his government "will never let harm come the way of small entrepreneurs, farmers, livestock rearers,” Trump’s diktats to our government have caused a deep unrest in the Indian agrarian community.

Let’s test Modi’s assurances against the case of cotton. Under tariff pressure, India scrapped the 11% import duty on cotton until September 2025, bringing it down to zero. More strikingly, after Modi’s remarks, this zero-duty window was extended until December 2025, with the possibility of further extension.

This single step has destroyed cotton farmers and small traders while causing huge losses to the country. For starters, the price of cotton has fallen by over Rs 1,100 per candy. And India, which is the biggest producer of cotton, has to now import American cotton. 

In the case of agrarian trade, India’s exports to the US were projected to touch $7.7 billion, while US exports to India could cross $3.5 billion in 2025. India’s agricultural exports comprise seafood (frozen shrimp), spices, essential oils, basmati rice, processed fruits and vegetables as well as baked foods. 

From the US, India receives almonds, pistachio, soybean, corn, cotton and ethanol. It is also important to keep in mind that American agrarian surpluses are a compulsory clause of all trade deals signed between India and the US irrespective of the leader at helm. Trump pushed for greater market access for American agri-products in his first term and is advancing the same agenda today. 

He wants to tip the balance and support American farmers by giving heavy subsidies to their industrial-agriculture complex while backing it with export subsidies, so that American products can land in developing countries like India.

However, most of the agri-commodities that Trump wants to dump on India – like dairy, ethanol, corn and soybean – are of genetically modified origins, which present a major health risk and constitutional breach for our country.

Currently, India, like the European Union (EU), doesn’t allow GM foods or GM-origin foods in the market citing health and biodiversity risks. Trump wants to reverse this trend and forcefully open the markets. The Americans still think India will accept sub-standard Cattle wheat as we did during the PL-480 days. 

Moreover, it’s not just Russian oil that Trump is upset about. It’s also milk. India has been constantly resisting the American government’s attempts to allow GM-origin milk and other milk products into India. 

Milk is the main income source for most small and medium farmers in the country. Flooding Indian markets with subsided US-origin milk will not only destroy their livelihoods and the market, but also present a major health risk for our children

As the Trump administration refuses to back down, we may see India give in and allow concessions on milk, like it did in the case of cotton. Meanwhile, as ethanol blending increases, Trump also wants to offload ethanol surpluses in India as a substitute for Russian oil. 

The question of WTO

But can Trump do this? What happened to the World Trade Organisation and other international conventions for protection of farmers in developing countries? 

On the surface-level, one can assume that Trump is a wild card, but on an economic level, he is deeply aligned with US state interests and is dismantling the WTO using his presidency. India, as a result of this bilateral bullying, would be forced to open its markets for US agriculture surpluses, something the WTO failed to do. 

The US, which is a principal supporter and creator of the WTO, used the WTO systems to attack India on a range of issues – food reserves, public distribution system, minimum support price and even market access. But India, with the help of African nations and other developing countries, managed to safeguard her farmers. This created a stalemate for American farmers as India had the support to defend herself. 

Thus, Trump steered the US towards bilateral modality, making WTO negotiations almost redundant. For the US, this is a win-win. It first milked the WTO system dry and is now using different economic weapons to serve deeper economic interests. 

What can India do?

India can do very little to withstand this onslaught. Had New Delhi taken the BRICS++ platform seriously, it could have developed an agricultural trade framework within it. If member states were supplying and purchasing using national or BRICS currencies, the loss of the US market would not have hit India as hard. 

But at this stage, India remains heavily dependent on the US – both as an export destination for agriculture and manufactured goods, and as a major source of remittances that bolster our forex reserves. This leaves India with little choice but to tread cautiously.

India must initiate a new engagement with BRICS++. China too has offered help in establishing WTO-like values, which if implemented correctly, could safeguard the interest of developing countries and their farmers while facilitating mutually beneficial trade. The coming together of Russia, China, Brazil, India and African nations itself is a power tool of economic and agrarian defence.  

Trump is already using tariffs to create new advantages for countries like Pakistan and Vietnam, which can now export agriculture and meat to the US at lower costs. The question is: what can our prime minister do to prevent this agrarian takeover and will his actions live up to his own statements?

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