NITI Aayog’s US Trade Proposal: A Risk to India’s Food Security?

A recent NITI Aayog paper recommends significant tariff cuts on key US agricultural imports—rice, dairy, poultry, corn, apples, almonds, and genetically modified (GM) soya—under the proposed India-US Free Trade Agreement (FTA). However, experts warn these moves could critically undermine India’s food security, farmer incomes, and trade sovereignty.

Key Recommendations and Criticisms

• Rice Tariff Elimination: A Dangerous Precedent
  • NITI suggests scrapping tariffs on US rice, citing India’s rice export surplus.
  • Critique: Historical lessons from the PL-480 era (1960s–70s) and GATT rounds show that prematurely locking low tariffs can lead to long-term vulnerabilities.
• Vulnerability to Global Price Volatility
  • The paper ignores risks of global grain price crashes (like in 2014–2016) and price spikes (2005–2008, 2010–11).
  • Without tariffs, cheap US subsidised grains could flood Indian markets, discouraging local production.
• Undermining India’s WTO Position
  • Removing rice tariffs may reward US trade lobbies that consistently challenge India’s MSP and procurement policies at the WTO.
  • For example, the USA Rice Federation has accused India of distorting global markets through its subsidy system.

Genetically Modified Imports

GM Corn and Soy: Containment Unrealistic

• Recommends importing:
  • GM corn byproducts (DDGS) for animal feed (re-export model).
  • GM soybean seeds for coastal crushing under a “controlled” model.
• Critique: India’s fragmented supply chains and poor enforcement make GM contamination likely, risking:
  • Domestic food chain pollution.
  • Export bans from countries rejecting GMOs.

Why This Matters

Strategic Autonomy and Rural Stability

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• The paper underestimates:
  • India’s reliance on tariff flexibility to manage food price shocks.
  • The fragility of rural incomes and the scale of agrarian employment (700+ million people).
• Tariff flexibility is not outdated protectionism—it is a vital tool to:
  • Stabilize domestic markets,
  • Insulate small farmers from subsidized imports,
  • And safeguard food security.

Need for Democratic Consultation

• Any decision to liberalise the farm sector under FTA must involve:
  • State governments
  • Farmer organizations
  • Independent experts

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