India To Remove Non-tariff Barriers On Agri And Dairy Imports

Chennai: India has agreed to remove non-tariff barriers on food and agricultural products under the interim framework of the trade agreement with the US. Under similar agreements with other countries, genetically modified soybeans, corn and dairy products will be allowed into the country. If India meets its $500 billion import commitment, which seems unlikely, the country’s trade balance will fall from surplus to deficit next year.

“Recognizing the importance of working together to resolve long-standing concerns, India also agrees to address long-standing non-tariff barriers to trade in U.S. food and agricultural products,” the statement said.

Malaysia has a similar provision under the trade agreement; This provision allows the import of dairy, meat and poultry products from the United States if they have health and hygiene certificates from the relevant American authorities. This concession means that U.S. certification will prevail over Malaysia’s local health and hygiene requirements, according to GTRI.

“In addition, India will eliminate or reduce tariffs on all U.S. industrial products and a broad range of U.S. food and agricultural products, including dried distillers grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, and additional products,” it said, but did not specify which additional products.

Both of these provisions could lead to the introduction of genetically modified foods such as corn, soybeans, cotton and maize, as well as dairy products from cows fed animal feed.

Additionally, in the framework statement published by the White House, it was stated that India plans to purchase US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal worth $ 500 billion in the next 5 years.

In Fiscal Year 25, US imports to India amounted to 48 billion dollars and exports to India amounted to 86.5 billion dollars. Annual imports of $100 billion will double imports from the US and turn India’s trade balance from surplus to deficit. Starting next year, India will run a trade deficit with the two major economies, the US and China.

However, this seems unlikely as aircraft are a key component of this commitment. Currently, India operates around 200 Boeing aircraft. Even if India adds 200 more Boeing aircraft over the next five years at an estimated cost of $300 million per aircraft, the total value will be around $60 billion. Moreover, such purchasing decisions are made by private airlines, not the state.