NITI Aayog for tariff cuts on US agri-dairy-poultry imports; experts sound warning

India and the United States are expected to sign a bilateral trade agreement soon as the negotiations are continuing in a positive direction so far. Amid this, NITI Aayog—the Indian government’s policy think tank—has released a working paper for May 2025, proposing tariff reductions on American agricultural, dairy, and poultry imports, a highly sensitive issue in India where over 700 million people depend on these sectors for their livelihood.

Key recommendations in the report

The report, titled Promoting India-US Agricultural Trade under the New US Trade Regime, has been authored by NITI Aayog member Ramesh Chand and senior advisor Raka Saxena. It warns that US President Donald Trump’s policy of reciprocal tariffs could adversely affect developing countries like India and revive protectionist trade measures.

Also read: Expect US-India trade deal in not-too-distant future: US commerce secy

Given this shift, the report advises India to strengthen its agriculture sector to remain competitive. It acknowledges that India-US agricultural trade is at a fragile juncture due to tariff-related tensions. To manage this, the authors suggest:

• Reducing tariffs on less sensitive import items from the US.
• Engaging the US in dialogue on non-tariff barriers, especially in poultry.
• Offering strategic concessions on imports of edible oils and dry fruits.

Specific product recommendations

The paper lists a range of US goods for which tariff cuts are recommended:

• Cereals and grains: Rice, corn (maize)
• Oils and pulses: Soybean oil, GM (genetically modified) soybean
• Protein and seafood: Shrimp, poultry, milk
• Fruits and nuts: Apples, almonds, pistachios
• Beverages: Tea, coffee
• Spices: Chili

For products like rice and chili, which India exports in large volumes, the report suggests removing tariffs as they do not pose a domestic threat. For items in short supply, such as soybean oil, it recommends a tariff relaxation.

It also proposes conditional permission for importing milk and poultry products if they meet India’s food safety norms. Imports of corn and GM soybean should be allowed for ethanol production or export processing, provided they are processed near ports and do not enter the wider domestic supply chain.

Also read: India mulls retaliatory tariffs as US rejects its WTO notice: Report

Expert pushback: ‘Detrimental to farmers, risky for food security’

Experts have raised serious objections to NITI Aayog’s proposals. According to Ajay Srivastava of the Global Trade Research Initiative (GTRI), the recommendations could harm Indian farmers in the long run, even if they help meet short-term needs.

He warned that:

• Removing tariffs on rice and corn is risky, as the US and Europe heavily subsidize their agriculture, allowing them to undercut prices globally.
• African nations have already seen domestic farming collapse under such pressure, becoming entirely import-dependent.
• India has over 100 million small-scale farmers, and similar exposure could force many out of agriculture.

Srivastava added that the US Rice Federation is already challenging India’s Minimum Support Price (MSP) and public procurement policies at the World Trade Organization (WTO). Reducing tariffs would only strengthen their case and increase external pressure on India.

Cultural and ethical concerns

On dairy and poultry, GTRI warned of health and cultural risks. Indian regulations prohibit milk from animals that have been fed meat or blood—a standard the US opposes. If India compromises on these rules and shifts solely to food safety testing, it could erode cultural and moral values.

Also read: Amid reciprocal tariff, NITI Aayog suggests 'dual-track approach' in India-US trade

GM products raise red flags

GTRI views the recommendation to allow GM soybean and corn imports as highly risky. While NITI Aayog suggests restricting processing to ports and exporting byproducts like soymeal, India’s weak regulatory enforcement, fragmented supply chains, and limited government oversight could allow such products to leak into the domestic ecosystem, polluting native agriculture and risking export bans.

Final word: ‘Proceed with caution, not in haste’

Experts stress that these policy shifts demand public consultation and inputs from agriculture experts, state governments, and farmer unions.

Former Planning Commission member NC Saxena also criticized NITI Aayog, arguing that it has lost focus and should concentrate on implementation and evaluation rather than macroeconomic policymaking.

Also read: China’s exports rise 4.8 pc in May as shipments to US fall

He emphasized the need for NITI Aayog to focus on enhancing farmer productivity and reducing costs, rather than risking India’s food security and agricultural sovereignty for trade concessions.

(This article was originally published in The Federal Desh)