| The trade gods seem to be smiling on India. The country seems set to be among the first to sign a trade deal with the US, amid talk of “early mutual wins.” Meanwhile exporters – from electronics to apparel — claim to already be making gains due to trade diversion from China (though caveats apply, as I’ve explained earlier). Most notably, Apple aims to build most iPhones for US in India by the end of next year. India will emerge as one of the key winners under Trump’s second term, as a beneficiary of the next round of supply-chain shifts, Nomura economists wrote in a report this week. In return, India is ready to shop more Made in America goods — from Boeing planes to Lockheed Martin fighter jets, West Texas crude oil to Tennessee bourbon and Harley Davidson bikes to Tesla cars. But the toughest sell for Trump will be in agriculture.  A farm laborer dusts fertilizer on rice saplings in the field at Sirsiwala village, Punjab, India. Photographer: Anindito Mukherjee/Bloomberg India’s farm sector provides livelihoods to over 45% of the population and contributes 16% to GDP, at least three times more than in the US. Yet, farms here are much smaller, far less productive and less subsidized by some estimates, than American farms. They are also more protected. India, a net food exporter, levies an average tariff rate of 39% on agricultural products versus 5% by the US, now an importer. “There is not much scope for India to concede much on agriculture because our farmers are too distressed to be exposed to cheap imports,” said Siraj Hussain, former agriculture secretary to the central government. On the face of it, the Trump administration wants the whole gamut of India’s farm sector policies reviewed – from tariffs to minimum support prices to the bar on genetically modified crops and sanitary regulations. But experts expect the negotiations to come down to a few key items such as American exports of soya bean, corn (maize), wheat, cotton, dairy products, seafood, poultry (chicken legs have been a contentious issue), livestock feed, ethanol, fruits and nuts among others. Each comes with distinct challenges. For instance, American soya bean and corn are genetically modified crops, not permitted by India, though the policy is currently under review and there are signs it may change. In dairy, India’s largest agricultural commodity, the country is not just self-sufficient but also the fastest growing producer in the world. Yet, it suffers the same small-farm problem. On average an American dairy farm has hundreds more cattle than the 2 to 3 animals that a typical Indian dairy farmer relies on. “For India’s 80 million dairy farmers this is a livelihood not a business and there is no case for import concessions,” said RS Sodhi, president of the Indian Dairy Association. He worries that any concessions made to the US will also have to be offered to other countries like New Zealand. That opposition, supported by government, is one key reason why India withdrew from the Regional Comprehensive Economic Partnership, a free trade agreement between 15 countries in the region. In cotton, Indian apparel manufacturers may welcome good quality American organic cotton but the impact on local prices could be significant, a challenge common to any farm imports India allows. It can be mitigated, at least partially. India could allow American cotton imports for concessions that boost apparel exports to the US. For other crops, it may implement price protection for farmers. “Whenever consumer prices go up the government intervenes by controlling stocks and banning exports,” said Sukhpal Singh, professor and former chairperson of the Centre for Management in Agriculture at the Indian Institute of Management, Ahmedabad. “Similar price support must be implemented for farmers, so they don’t suffer due to changing policies.” A measured opening up of India’s farm sector, with local market-access reforms, may have long term benefits. It could help raise quality and efficiency, said Singh. Imports may provide a buffer if India’s food production declines due to climate change, said Hussain. But the near term impact could be deleterious, economically for India and electorally for the Modi government, giving many hope that food will come to the negotiating table last. That may be wishful thinking, especially with the China and Canada markets closing for the US. Rising food consumption in the world’s most populous country is too good an opportunity to delay as apples have shown.  Workers load crates of apples onto a trailer at an orchard in Jammu and Kashmir. Photographer: Sumit Dayal/Bloomberg US apple exports surged after India lowered the retaliatory tariff in 2023 even as rising fruit imports draw protests from apple farmers in Himachal Pradesh and Jammu and Kashmir every harvest season. This Apple for apples trade-off will demand the best of two consummate dealmakers. How Donald Trump Became India’s New Best Friend — tune in to this week’s Trumponomics podcast. | 
