The May 2025 NITI Aayog paper, ‘Promoting India-US Agricultural Trade Under New US Trade Regime’, outlines a strategy to enhance trade with the U.S. by selectively importing items like GM soybean oil and corn for ethanol, ensuring no harm to domestic producers.
It suggests tariff cuts on non-competing products, use of SPS norms to protect sensitive sectors, and boosting dairy exports. The paper also emphasizes closing crop yield gaps and implementing structural reforms to enhance India’s global agricultural competitiveness.
In a working paper titled ‘Promoting India-US Agricultural Trade Under New US Trade Regime’ published in May 2025, the NITI Aayog presents a strategic roadmap to strengthen and expand agricultural trade ties between India and the United States. Authored by NITI Aayog member Mr Ramesh Chand, the paper proposes a carefully calibrated approach to importing select U.S. agricultural commodities—particularly soybean and corn—in ways that protect domestic producers while addressing trade imbalances.
India, as the world’s largest importer of edible oil, could strategically benefit from the U.S.’s significant surplus of genetically modified (GM) soybean.
However, since GM products are banned in India and currently under judicial review, the paper recommends a workaround. It proposes importing GM soybean oil or GM soybean seeds for processing in coastal regions. The extracted oil can be used to meet domestic demand, while the by-product—soybean meal, for which there is strong international demand—can be exported. This strategy ensures that GM content does not enter India’s livestock feed supply and also shields domestic farmers from direct competition.
These selective imports could help India effectively utilize its US$ 18 billion edible oil import budget to reduce the agricultural trade deficit with the U.S., discourage retaliatory tariffs, and unlock new export avenues for Indian agricultural products in the U.S. market.
The paper also suggests the possibility of reducing tariffs on certain agricultural imports where local production is minimal or non-competitive due to quality or seasonal differences. For example, U.S. apples, which enjoy premium pricing in Indian markets because of their superior quality, longer shelf life, and off-season availability, are unlikely to harm domestic producers if tariffs are moderately lowered.
Similarly, the paper supports importing U.S. corn for ethanol production, as it is cost-effective and aligns with India’s biofuel goals. The by-product, Distiller’s Dried Grains with Solubles (DDGS), can be exported, preventing any GM feed from entering the Indian agricultural system and ensuring local food and feed markets remain unaffected.
A critical issue highlighted in the paper is the wide yield gap in key crops such as soybean and maize. Due to limited access to advanced farming technologies, India’s average soybean yield remains around 1 tonne per hectare—well below the U.S. average of 3.4 tonnes. Similarly, Indian maize yields average 3.5 tonnes per hectare, compared to 11.1 tonnes per hectare in the U.S. The paper argues that bridging this gap is essential for improving India’s agricultural productivity and global competitiveness.
To address these challenges, the paper calls for medium-term structural reforms in Indian agriculture. These include the adoption of advanced technologies, investment in logistics and infrastructure, development of efficient and competitive value chains, greater private sector participation, and active engagement of state governments in implementing agricultural reforms.
The paper suggests using non-tariff measures, such as enforcing sanitary and phytosanitary (SPS) standards, to protect vulnerable sectors like dairy and poultry. It points out that frequent disease outbreaks, such as avian influenza in the U.S. poultry industry, give India a justified basis to apply SPS regulations as a safeguard in trade agreements.
In addition to managing imports, the paper also emphasizes opportunities for expanding Indian agricultural exports. It highlights the recent success of Amul milk being sold in the U.S. as an example of how Indian dairy products can gain a foothold in international markets through improved quality and competitiveness.
Furthermore, the paper recommends allowing imports of products that do not compete directly with domestic agriculture, such as pistachios, almonds, and off-season apples, which pose little risk to Indian farmers due to differences in quality grades, growing seasons or consumer segments.
The paper underlines that India has traditionally maintained a surplus in agricultural trade with the United States. To build on this advantage and enhance export performance, the paper emphasizes the need for India to secure broader market access for its agricultural goods in the years ahead.
