India-Rus Trade Deal: The talks on the much awaited trade agreement between India and America have once again intensified. The Indian delegation has reached Washington and it is expected that there may be a major announcement before the deadline of 1 August 2025 to implement tariffs by the US. However, this deal is currently entangled in disputes related to agriculture and dairy sector. The US wants India to open these areas for American products, but India is not ready to compromise on the interests of farmers.
Government’s clear attitude – farmers will not be harmed
The Government of India has bluntly said that under any kind of pressure, the interests of the farmers of the country will not be compromised. Union Agriculture Minister Shivraj Singh Chauhan has already made it clear that the decision of any trade deal will be taken keeping in mind the benefits of Indian farmers. Commerce Minister Piyush Goyal has also reiterated that FTA should be such that both countries benefit equally.
SBI report mentions loss
According to the latest report of SBI Research, if India opens its market for American dairy products, it can cause major economic losses to about 8 crore farmers of the country. According to the report, milk prices may fall by 15-20%, which can lead to a total revenue of ₹ 1.8 lakh crore. Out of this, farmers will have to face more than 60% loss, which can reach about ₹ 1.03 lakh crore annually.
The dairy sector is a large part of the rural economy of India and its contribution to GVA (gross price promotion) is 2.5-3%, which is equal to about ₹ 7.5-9 lakh crores. In such a situation, it is not only economic, but also a social and strategic matter.
India’s milk imports can increase up to 25 million tonnes
The report warns that the US gives heavy subsidy to its dairy products. If India opens its market for American products, then the country’s milk imports can increase up to 25 million tonnes, which can make the country’s small and medium dairy farmers completely in trouble.
GTRI report also warned
Another report by Global Trade Research Initiative (GTRI) states that America’s heavy subsidized products, such as dairy, poultry, GM soy and rice can pose a serious threat to India’s agricultural economy and food security. It has also been said that India should take any step in this direction very carefully.
NITI Aayog’s suggestion- Focus of deal on service sector
The NITI Aayog has said in its trade report on Monday that India should work towards the service-oriented agreement with the US, as in the Indo-UK agreement. The Commission has advised to pay special attention to them, describing IT, Financial Services, Professional Services and Education as the main sector. NITI Aayog has also said that strong provisions for digital trade and concrete outline for border service delivery should be part of this deal.
The first phase of the agreement can be completed by September-October
India and the United States want to complete the first phase of the proposed bilateral trade agreement (BTA) by September-October this year. Earlier, the two countries are trying to finalize an interim trade agreement. In the April-May period of FY 2025-26, India’s goods exports to the US increased by 21.78% to $ 17.25 billion, while imports increased by 25.8% to $ 8.87 billion.