New Delhi: India is poised to recalibrate its agricultural trade strategy with the United States under a revised trade framework, with a focus on expanding bilateral cooperation while maintaining domestic price stability. In a recent working paper, government think tank NITI Aayog has advised a pragmatic review of India’s import duties, suggesting selective tariff relaxations on non-essential U.S. agricultural products and strategic concessions on items in short supply domestically.
The paper outlines the potential for deepening agricultural engagement between the two countries, which already accounts for a $5.75 billion annual export value from India to the U.S. It emphasizes that India should make calibrated decisions based on reciprocal duties imposed by the United States, balancing domestic interests with long-term trade gains.
NITI Aayog recommends that India temporarily lower high import duties on select non-essential agricultural items from the U.S., particularly where local production is sufficient or consumer demand can be supplemented without harming domestic farmers. This step is seen as a diplomatic and economic maneuver to strengthen bilateral ties under the evolving U.S. trade policy regime.
One of the paper’s central proposals includes offering concessions on U.S. soybean oil imports, citing India’s heavy dependence on edible oil imports. By allowing limited, tariff-reduced access to soybean oil from the U.S., India could both ease inflationary pressures on consumers and reduce trade imbalances—without significantly disrupting domestic producers, the report argues.
The working paper stresses that India's agricultural trade policy must ensure price stability across the supply chain—benefiting both farmers and consumers. Selective liberalization of agricultural imports is presented as a tool to manage price volatility, especially in the wake of global disruptions and climate-linked supply uncertainties.
It further calls for a more nuanced approach to import tariffs, advocating for short-term policy shifts based on market demand and supply gaps, rather than rigid protectionist measures. This, NITI Aayog suggests, would allow India to protect core agricultural sectors while leveraging trade strategically for economic resilience.
The document also touches upon the broader geopolitical landscape, particularly in light of the surprise re-imposition of reciprocal tariffs by the U.S. following Donald Trump’s re-election, which unsettled many of Washington's trading partners. In this context, India is urged to adopt a flexible and responsive trade posture—one that acknowledges global uncertainties while positioning itself as a reliable and cooperative trade ally.
India’s trade relationship with the U.S. has grown significantly over the past decade, with agriculture emerging as a promising sector for collaboration. The current strategy, as outlined by NITI Aayog, aims to refine that partnership by identifying mutually beneficial opportunities, focusing on high-demand commodities and easing friction caused by tariff disputes.
The paper ultimately envisions a trade ecosystem where India secures essential agricultural inputs, especially during domestic shortages, while also making targeted concessions that reinforce its strategic alliance with the U.S. Such a move is seen as instrumental in safeguarding national food security and ensuring economic stability in an increasingly unpredictable global market.
As policymakers deliberate on the suggestions, the report serves as a roadmap for India’s evolving trade dynamics with the U.S., particularly in an era where agriculture, food security, and diplomacy are increasingly interlinked.