Trade talks between India and the United States have resumed, with corn imports emerging as a significant issue. The US is pressuring India due to a decline in its sales to China, while India is reluctant to import American corn owing to tariffs and restrictions on GM corn.
India-US Trade: Trade talks between India and the United States have recommenced, with tariffs and the import of GM corn becoming major points of contention. Following a decrease in its sales to China, the US is pushing India to buy its corn. However, India is unwilling to import American corn due to its domestic market considerations and import regulations.
India's Corn Imports
In the fiscal year 2024-25, India imported a mere 1,100 tons of American corn. This is a negligible amount within India's total corn imports of 0.97 million tons. India primarily imports corn from Myanmar and Ukraine. Conversely, the US is keen to sell its corn to India, with American officials believing that India should purchase corn from the US.
America's Motivation
Previously, China was the largest buyer of American corn. However, China reduced its imports of US corn from $5.2 billion in 2022 to a mere $331 million in 2024. Consequently, America's total corn exports also declined from $18.57 billion in 2022 to $13.7 billion in 2024. This reduction has prompted the US to seek large markets like India.
The US is trying to exert pressure on India to buy its corn.
Current Corn Prices in India
India is refraining from purchasing American corn for several reasons. The first reason is tariffs. India imposes a 15 percent tariff on the import of 500,000 tons of corn annually. Beyond this limit, an additional hefty duty of 50 percent is levied on further imports.
The second reason is the ban on GM (genetically modified) corn. India prohibits the import of genetically modified corn, whereas 94 percent of corn in the US is GM-based. This poses a significant hurdle for India.
India Refuses US Corn Imports
The influx of American corn into India could have a severe impact on the domestic market. Corn prices in India are currently between Rs 22-23 per kg, with the government-set Minimum Support Price (MSP) at Rs 24 per kg. In contrast, American corn is available at prices even lower than Rs 15 per kg. The arrival of such cheap American corn could harm domestic corn farmers.
In this situation, India has made it clear that it will not import American corn.
Trade Negotiations Between India and the US Continue
Trade negotiations between India and the US are currently ongoing. The US is pressuring India to increase its corn sales. India has clarified that any decision will be made keeping in mind the domestic market and the protection of its farmers. India will not make any immediate changes to its policies on tariffs and GM corn.
Agricultural imports have always been a sensitive topic in trade agreements between the two countries. While India represents a large potential market for the US, India maintains a firm stance on its food security and the protection of its domestic producers.
