GTRI Issues Warning on Potential Impact of India’s Tariff Removal on Companies

India is currently engaged in trade negotiations with the United States, focusing on the potential impacts of reducing agricultural tariffs. The Global Trade Research Initiative (GTRI) has raised concerns that lowering import duties on U.S. farm products could threaten India’s food security and undermine its agricultural policies. GTRI warns that such changes could lead to an influx of subsidized U.S. grains into Indian markets, which would be detrimental to local farmers and rural livelihoods.

Concerns Over Agricultural Tariff Reductions

As discussions progress in Washington, there is mounting pressure on India to lower tariffs on key U.S. agricultural exports, including rice, dairy, poultry, corn, almonds, apples, and genetically modified soy. The GTRI emphasizes that reducing these tariffs could expose Indian farmers to competition from subsidized U.S. imports, jeopardizing the livelihoods of over 700 million rural residents. Historical data indicates that global grain prices can fluctuate significantly, as seen between 2014 and 2016 when wheat prices fell below $160 per tonne, adversely affecting farmers in various regions, including Africa.

Ajay Srivastava, the founder of GTRI, stated that India must retain the ability to manage its food stocks and support rural incomes. He highlighted the importance of maintaining a sovereign approach to food security, especially in a geopolitically unstable world. The GTRI’s position is that India should not repeat past mistakes made in trade agreements that compromised local agricultural sectors.

Impact on India’s Dairy and Poultry Sectors

The potential reduction of tariffs on U.S. agricultural imports raises specific concerns for India’s dairy and poultry sectors. Srivastava pointed out that India’s stringent dairy import protocols, which prohibit feeding animals with certain animal by-products, effectively limit the entry of U.S. dairy products into the Indian market. While the U.S. views these regulations as excessive, Indian authorities are cautious about the implications of consuming dairy from animals fed with meat and blood from other cattle.

In the poultry sector, a relaxation of import regulations could severely impact domestic producers. India’s inadequate cold storage infrastructure and insufficient sanitary and phytosanitary (SPS) measures further complicate the situation. The GTRI warns that allowing subsidized U.S. poultry imports could disrupt local markets and threaten the livelihoods of small-scale farmers who rely on poultry production.

Genetically Modified Organisms and Trade Regulations

The U.S. has expressed dissatisfaction with India’s regulations regarding genetically modified (GM) foods, describing them as ambiguous and lacking a scientific basis. This has hindered American biotechnology exports to India. However, India remains cautious due to strong public opposition to GM foods and concerns about environmental risks. The country is particularly wary of the potential for GM traits to contaminate local crops, which could negatively impact exports to markets sensitive to GM products.

GTRI’s Srivastava noted that India’s requirement for non-GM and GM-free certificates across various products is essential for ensuring product traceability and maintaining consumer trust. He emphasized that while the U.S. seeks to export various subsidized agricultural products to India, such as apples, almonds, and corn, these imports could undercut local producers and distort the market.

The Importance of Tariffs for India’s Agricultural Sector

India employs a range of tariffs, from 0% to 150%, to protect its agricultural sector, which is vital for the sustenance of millions. The GTRI argues that these tariffs are crucial for safeguarding small-scale farmers, managing price fluctuations, and ensuring food security. In contrast, U.S. agriculture operates on corporate principles, with substantial government subsidies often exceeding 50% of production costs for certain crops.

The U.S. imposes high tariffs on its own agricultural products, such as tobacco, which highlights the complexities of trade negotiations. Srivastava pointed out that the U.S. often overlooks its own protective measures while pushing for concessions from India. As the trade talks continue, the stakes remain high for India’s agricultural sector, which plays a critical role in the country’s economy and food security.

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