Slashing food tariffs: NITI's push for US mkt access may hurt food security

A recent NITI Aayog paper recommends sweeping tariff cuts on a range of agricultural imports from the United States — including rice, dairy, poultry, corn, apples, almonds, and genetically-modified soya — as part of the proposed India-US Free Trade Agreement.  The paper, titled “Promoting India-US Agricultural Trade under the new US Trade Regime,” was published in May. We look at its key recommendations and what they could mean for India’s food security. Let’s start with rice — India’s staple food across states.  Rice: The paper suggests scrapping import tariffs on US rice, as India already exports large amounts of rice and hence faces little risk from imports. While this argument sounds reasonable at first glance, it overlooks a costly mistake India made in the past.  In the 1960s and early 1970s, India faced food shortages and depended on US food imports under PL-480 — a US law that allowed surplus food to be sold or donated to countries like India. 

  During global trade talks (Kennedy and Tokyo Rounds of General Agreement on Tariffs and Trade or GATT, 1964–1979), India — then a major food importer—agreed to US proposals to lock its tariffs at zero on key staples like rice, wheat, and skimmed milk powder. This meant India gave up the right to raise tariffs on these items in the future.  Later, the Green Revolution significantly boosted India’s farm output, and by the early 1990s, the country had become self-sufficient in rice and wheat. Indian farmers now needed tariff protection from cheap, subsidised imports — but the old GATT commitments left India unable to raise tariffs. The only legal option was to renegotiate under GATT’s Article XXVIII, which India did in the 1990s.  However, renegotiations were costly: India had to lower tariffs on other items, such as butter, cheese, apples, citrus fruit, and olive oil, to compensate its trade partners, including the US and the European Union. Some of these subsidised products flooded the Indian market, hurting local farmers.  The key lesson is that once a country legally commits to low or zero tariffs, regaining flexibility is very difficult and expensive. Temporary surpluses should not justify permanent tariff cuts in core farm products. The NITI Aayog paper overlooks this critical point.  Global grain price volatility: The NITI Aayog paper also overlooks the risks associated with global grain price fluctuations. For example, from 2014 to 2016, global grain prices crashed — wheat fell below $160 per tonne — forcing many African farmers out of business. If India removes tariffs, cheap and subsidised  US grains could flood the market in such times, leaving Indian produce unsold, and discouraging farmers from planting the next crop. This would make India dependent on imports.  If global prices later spike — as they did in 2005–08 and 2010–11 (wheat prices increased by 130 per cent, while maize prices rose by 70 per cent) — India would face expensive emergency imports, just as Ghana and Nigeria did during those years.  Such boom-bust cycles have damaged food security in many African nations. India must avoid this. With over 100 million small farmers, it should keep tariffs on staples like rice and wheat to protect farmers and ensure stable food supplies.  Also, removing rice tariffs would reward the very groups attacking India’s food policies. The USA Rice Federation has repeatedly challenged India at the World Trade Organization, accusing it of breaking subsidy rules and distorting trade through its minimum support price and public procurement. Cutting tariffs in a US trade deal would only strengthen their efforts to weaken India’s food security system, which protects both farmers and consumers.  With food security now shaped by geopolitics, climate change, and market manipulation, India must be cautious.  Dairy and poultry: The NITI Aayog paper suggests India should cut tariffs on US dairy and poultry imports and regulate imports through SPS (sanitary and phytosanitary) standards. SPS standards are designed to ensure food safety and protect human, animal, and plant health.  Replacing tariffs with weaker SPS measures —which are more easily challenged — would promote imports. The US has long opposed India’s rule that imported milk must come from animals not fed meat or blood, a rule India considers essential for health and cultural reasons. Additionally, India’s SPS enforcement is patchy and lacks robust technical support, rendering it an unreliable substitute for tariffs. Cutting tariffs on dairy and poultry, therefore, would be a mistake.  GM corn, soya seeds: NITI Aayog proposes allowing imports of US corn for ethanol blending. This is currently banned in India. It supports importing DDGS (distiller’s dried grains with solubles) — a genetically modified (GMO) corn byproduct used in animal feed — for processing and re-export. The argument is that this would prevent GM material from entering India’s domestic food and feed supply.  The paper also recommends importing GM soybean seeds under a “controlled” model, where the seeds would be crushed in coastal areas, the oil sold locally, and the soymeal (which contains GM traits) exported to avoid domestic contamination.  However, India’s fragmented supply chains and weak SPS enforcement make such controls unrealistic. Once GM products enter, they are likely to leak into local agriculture — risking food safety, harming the environment, and exposing Indian exports to bans from countries that reject GM contamination.  Recommendations: India should exercise caution before reducing farm tariffs under the proposed trade deal with the US. Once reduced, tariffs are tough to raise again — even if global prices crash or Indian farmers suffer losses. This could leave India vulnerable, especially since countries like the US and the EU continue to subsidise their farmers heavily.  Keeping tariff flexibility isn’t outdated protectionism — it’s a necessary tool to protect food security, support rural incomes, and manage market shocks. In today’s world of rising food insecurity, climate risks, and unpredictable trade behaviour, India must preserve its ability to shield farmers and consumers from global market shocks.  India must hold open, transparent discussions with state governments, farmer groups, and experts before making any binding decisions on opening the farm sector under the FTA. Farming supports over 700 million people — it’s not just a livelihood but the backbone of the rural economy and the nation’s food system.    The author is founder, Global Trade Research Initiative