Datanomics: Market access vs mass survival in unequal India-US fields

The US move on tariff is seen as its pressure tactics on forcing New Delhi to sign a bilateral trade agreement (BTA) with Washington

United States (US) President Donald Trump announced imports from India would face a 25 per cent tariff over the existing most-favoured-nation rates, citing India’s high trade barriers and “strenuous and obnoxious” non-monetary restrictions. This move is seen as a pressure tactic to force India into signing a bilateral trade agreement (BTA). However, one of the major bones of contention in the BTA negotiations is agriculture. The US is demanding greater access to Indian agri markets. In the US, farmers receive direct income payments. In India, support is largely through subsidised inputs, public procurement, and food distribution schemes — offering basic price protection, but few income guarantees. India has also been providing direct income support through schemes such as PM-KISAN Samman Nidhi, and various similar schemes in the  states. India’s average agricultural tariff  — 39 per cent — third highest globally,  isn’t whimsical. It might be essential.

 

India lags in total subsidy per farmer in PPP terms 

 

On purchasing power parity (PPP) terms, India’s total subsidy per farmer is nearly 9 times lower than in the US. Of the $297 billion India spends, each farmer (annual average) gets $2,676, far below the US’ $23,186. Of this, just $290 per farmer comes as direct income support through PM-KISAN 

 

Tariff tussle

 

India has consistently maintained higher applied tariffs on agricultural products compared to the US 

Source: WTO’s World Tariff Profile Reports