Thanks, but no thanks. India doesn’t really need US soybean, corn or milk

On September 17, eminent agricultural scientist Ashok Gulati made a strong pitch for opening up Indian agriculture and dairy sectors to the US and not risk losing USD 50 billion in exports to it. Talking to a news channel, he asked why edible oil attracted 10 per cent duty, cotton zero, but corn 45 per cent, and soybean and skimmed milk powder between 50-60 per cent.

“We have been unduly overprotective. My feeling is 80 per cent of our agriculture is very competitive”, he said.

What advocates of GM crops say

Essentially, Gulati made three points:

(a) India is not self-sufficient in agriculture; it imports USD 37 billion worth of farm products, of which USD 2 billion is from the US, while it exports about USD 5.9 billion.

(b) “Almost 55 to 60 per cent of the edible oil” consumed is imported, and...

(c) Ninety-nine per cent of domestic cotton is a genetically modified (GM) crop, and its seeds are fed to poultry and cattle.

But India is refusing to allow GM corn from the US — which is “not based on science” but “an ideology” — and India can easily import up to two million tons of corn when its production is around 42 million tons.

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In May this year, the NITI Aayog made a similar argument in its paper 'Promoting India-US Agricultural Trade Under the New US Trade Regime', where it recommended imports of GM corn and soybean. But it quietly withdrew it a few weeks later without offering any explanation, after facing severe criticism from farmers’ groups and the industry.

The Aayog’s two arguments were:

(a) Since India is the largest importer of edible oil in the world and the US has a large surplus of GM soybean (source of soybean oil), India should offer concessions to the US, without affecting its soybean production, and

(b) It should allow GM corn for feedstock, ethanol blending, and export processing. It said India could do so while maintaining restrictions on those GM materials in the domestic food supply.

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Here is a reality check on these claims.

Does India need US soybeans?

India is not self-sufficient in all food production.

UK-based service provider Savills’ Global Food Self-Sufficiency Tracker, in the past, listed 10 countries that were self-sufficient in food production in 2024 (of the 20 countries it tracks for this purpose) — that is, they produce more than 100 per cent of what they consume. These countries include New Zealand, Australia, France, Brazil, and the US.

India allowed the cultivation of GM cotton (Bt cotton) in 2002 but didn't allow the cultivation of GM brinjal and GM mustard. It does not allow the import of any GM food item. This is hypocritical also because cottonseed oil is allowed as an edible oil, and cakes from cottonseed are used as animal feed.

India, which doesn't figure even in the list of 20, is heavily dependent on imported edible oil and pulses. As parliamentary answers reveal, its import dependency on edible oil is over 55 per cent and on pulses around 20 per cent.

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The US is offering raw soybean (GM), not soybean oil or soyoil, extracted and processed from soybean seeds. India imports soyoil from Argentina, Brazil, Russia, Ukraine, and even Nepal. The country's soyoil import has been rising of late.

The Solvent Extractors' Association of India (SEA) data has been quoted to show that in the 2024-25 marketing year (counting from harvest to harvest in October), India’s soyoil import accounted for 21.7 per cent of total edible oil import (volume), almost the same as sunflower oil, while the bulk, 56.8 per cent, was palm oil from Indonesia and Thailand.

Soyoil was initially bought as a substitute for palm oil, but is now being used to replace rapeseed oil, which has become more expensive in recent times.

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So, how buying the US soy will help India is not clear yet.

India doesn't need US corn

India is self-sufficient in corn (maize) production.

The Ministry of Commerce and Industry has pointed out that India is the fifth-largest producer and 14th-largest exporter of maize in the world. In FY24, the Directorate General of Commercial Intelligence and Statistics (DGCI&S) data showed that India imported sweet corn and other varieties worth only Rs 27.3 lakh. Business papers write that more than 60 per cent of corn produced is used as poultry and animal feed, and 20 per cent for industrial use.

US President Donald Trump has imposed a reciprocal tariff to cut down trade deficits (and a penalty tariff for buying Russian crude). But the country has another reason to force India to open its agricultural sector in particular. Trump is under pressure since soybean and corn farmers are his voter base.

As for its use for ethanol, India has achieved a 20 per cent (E20) mix in petrol five years ahead of time — implying a sufficient supply of sugarcane, corn (maize), wheat, and rice from which ethanol is produced.

Also read: Should India placate Trump administration by allowing imports of GM crops?

So, India doesn’t really need the US corn for either use.

Doubts over ethanol blending

As for ethanol blending, it is time for India to pause and assess the impact of E20 on automobile engines and mileage. There is no credible study on this.

To begin with, no data exist to show how many automobiles have E20-compliant engines. The NITI Aayog had, in its June 2021 E20 rollout plan, simply said, “E20 material compliant and E10 engine tuned vehicles may be rolled out all across the country from April 2023.”

It would be a surprise if any retail outlet sells E20 or even E10 petrol. Casual inquiries in Delhi-NCR revealed that many outlets either don’t sell E20 petrol or have stopped to allay customers' anxiety.

India self-sufficient in dairy sector

According to the Ministry of Fisheries, Animal Husbandry, and Dairying, India has the world’s biggest dairy industry, and it exported USD 272.6 million of milk and dairy products in FY24.

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It also says that it is not just the production of milk that is growing. The per capita availability of milk also went up to 471 grams per day in February 2025 — higher than the Indian Council of Medical Research's recommendation of 300 grams per capita per day.

Clearly, India doesn't need US milk or milk products.

Then, there are other issues with it.

Issues with 'non-vegetarian' milk

Milk from the US has become a culturally sensitive issue because of the rumoured mix of animal parts in their cattle feed — now branded as “non-vegetarian milk”. Even trade experts have weighed in with such arguments.

The Food Safety and Standards Authority of India (FSSAI) had laid the ground earlier. In 2011, it defined “non-vegetarian food” as any food with any animal part, “but excluding milk or milk products, as an ingredient”, and directed products to be specifically marked as veg or non-veg. That the milk India consumes comes from animals didn’t occur to it.

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This definition was introduced in the Food Safety and Standards (Packaging and Labelling) Regulations of 2011. The FSSI then told the Delhi High Court the same in an affidavit in 2022.

Recall how India had pulled out of the negotiations with the China-led Regional Comprehensive Economic Partnership (RCEP) trading bloc in 2019 and refused to sign it. At the time, thousands of Gujarati women working in the dairy sector had written to the Prime Minister’s Office not to allow the import of milk and dairy products from the mega bloc.

They feared, and the Indian government seemed in agreement, that the Indian market would be flooded with cheaper milk and its products from New Zealand and Australia, hurting their income.

The GM conundrum

Gulati is right in criticising India’s hypocrisy over GM crops, though.

India allowed the cultivation of GM cotton (Bt cotton) in 2002, but didn't allow that of GM brinjal and GM mustard. It does not allow the import of any GM food item.

Also read: Is there life after Bt cotton?

This is hypocritical also because cottonseed oil is allowed as an edible oil, and cakes from cottonseed are used as animal feed. Given that “more than 96 per cent area under cotton cultivation is occupied by the Bt cotton” (as the Ministry of Agriculture and Farmers Welfare said in August 2024), GM cotton has already entered the Indian food chain — though its impact is yet to be studied.

There is more.

US pressure to open farm, dairy sectors

US President Donald Trump has imposed a reciprocal tariff on India to cut down trade deficits (and a penalty tariff for buying Russian crude). But Washington DC has another reason to force New Delhi to open its agricultural sector in particular.

The US milk has become a culturally sensitive issue because of the rumoured mix of animal parts in their cattle feed — now branded as “non-vegetarian milk”.

His trade war with China in 2018 led the latter to cut down imports of soybeans and corn from the US. It looked at Brazil for supplies, hurting American farmers. Trump’s latest trade war has accelerated this shift. He is under pressure since soybean and corn farmers constitute his voter base.

India's anticipation

Surely, the US will flood India with cheaper soy, corn and milk, and other dairy products, lowering market prices, thereby hurting the Indian farmers’ income.

Over 86 per cent of Indian farmers are small and marginal ones with less than two hectares (five acres) landholding, according to the Agriculture Census of 2015-16. Their numbers would have grown substantially, given a rapid rise in development projects which gobble up farm land.

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A few years ago, the Aayog had written that Indian farmers are among the poorest. Since 2019, all farmers, including those with larger landholdings, have been getting cash handouts of Rs 6,000 per year under the PM-KISAN scheme.

The government’s promise to double their income by 2022 has fizzled out. The Aayog was loud in cheering the government and wrote papers to show the way this could be achieved. It went silent long ago.

The above matters also because the US heavily subsidises its farmers — unlike India.

Yes, you read that right.

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How India treats its farmers

Gulati forgot that he had authored a research paper in 2018 (OECD-ICRIER study of 2018 ), which said Indian farmers lost Rs 2.65 lakh crore per annum or Rs 45 lakh crore (at 2017-18 prices) cumulatively for 17 years between 2000 and 2016 because of New Delhi’s distorted trade policies and inherent consumer bias.

He had also showcased another such study earlier this year (OECD’s 2024 study), which said exactly the same. In fact, according to this study, India was “the only country” in G20 which “implicitly taxes its agriculture by suppressing market prices” and had the highest “negative market support” (implicit tax) among 54 countries it tracked — at USD121 billion in 2023. This is a trend, it said, India had seen “throughout the last two decades”.

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This study also pointed out that the US paid a huge subsidy, averaging USD 42.9 billion during 2021-2023, directly to farmers. In all, 54 countries tracked had paid USD 842 billion in farm subsidies in 2021-23.

Strangely, now both Gulati and NITI Aayog have switched sides because Trump is using strong-arm tactics to derail a rule-based and voluntary international trade.