India should adopt a dual-track approach to protect its agri exports to US: NITI Aayog working paper

India should adopt a dual approach and offer tariff concessions on certain agricultural commodities to the US while also undertaking medium-term structural reforms to improve the global competitiveness of its farm sector amid ‘reciprocal tariff’ to keep a favorable environment for exports to the US, a NITI Aayog working paper said.

Written by NITI Aayog senior advisor Raka Saxena and member Ramesh Chand, the paper on ‘ Promoting India-US Agricultural Trade Under the New US Trade Regime’, suggests India should consider selectively reducing high tariffs on non-sensitive imports like US apples in the short-term.

“India should negotiate non-tariff safeguards on vulnerable segments such as poultry and can also strategically offer concessions where domestic supply gaps exist, such as in edible oils and nuts,” it said.

Talking about the medium-term structural reforms that India should undertake to improve the global competitiveness of its farm sector, the paper said India should bridge the productivity gap by embracing appropriate technologies, market reforms, private sector participation, improvement in logistics and development of competitive value chains.

India’s exports to the US include traditional items such as frozen shrimp, basmati rice, spices along with processed cereals, and other value-added products while its imports from the US remain concentrated in high-value commodities such as almonds, pistachios, and walnuts.

According to the paper, the ongoing negotiations between the two countries for a bilateral trade accord seem to be the best option for resetting the long term trade relationship.

“Given that the US is India’s largest trading partner and a key destination for Indian agri-exports, India must prepare a strategic response that protects domestic producers and promote overall domestic interests without escalating trade conflicts,” it argued.

The report outlines seven strategic interventions that could help in maintaining India-US agricultural trade relations.

This includes building structural competitiveness, strategic import substitution in case of edible oil and corn, protection of sensitive sectors like poultry and dairy through non-tariff measures, marketing reforms and export facilitation, tariff adjustments on US apples, almonds and pistachios and seeking reciprocal market access for high-performing exports through duty waivers.

Besides, it has proposed setting up of an Agri Trade Intelligence Cell to systematically monitor global supply situation, global trade trends, import surges, and price volatility.