India-US Trade Deal: Why Farmers Don’t Trust the Government’s Assurances

When thousands of farmers across India burnt symbolic copies of the India-US trade framework last month, they were not merely staging political theatre. They were articulating a deep, historically grounded distrust of government promises when it comes to agriculture. And on the evidence available, that distrust is entirely rational.

The Union government has moved quickly to reassure the country. Commerce Ministry officials have repeated, in press conferences and parliamentary statements, that sensitive agricultural commodities have been kept off the table. The deal, they insist, has safeguards built in. Indian farmers have nothing to fear. But farmers’ organisations are not convinced, and they are planning to escalate their agitation in the weeks ahead. To understand why, one must look beyond the official talking points and examine what the deal actually means for the structural position of Indian agriculture.

The core anxiety is straightforward. American agricultural exports are backed by a system of domestic support that would be illegal under WTO rules if India attempted anything comparable. The United States spends tens of billions of dollars annually subsidising its farm sector through direct payments, crop insurance support, and conservation programmes. American soybean, corn, wheat, and dairy producers are not competing on a level playing field. They are competing with a state-backed cushion beneath them. When Indian negotiators agree to even partial market access for such produce, they are not opening the door to competition. They are opening the door to subsidised dumping.

The government’s response, that sensitive products are excluded, misses this point rather dramatically. The question is not only which products are formally excluded from tariff reductions. The question is what happens to the broader price environment in agricultural markets once American agribusinesses gain a foothold in the Indian supply chain. Processed food, oilseeds, pulses, and dairy derivatives often do not appear on the headline list of “sensitive” commodities, yet they are the livelihood of millions of small and marginal farmers. A modest tariff concession on soy oil, for instance, can devastate mustard farmers in Rajasthan and Madhya Pradesh in ways that never show up in the government’s talking points.

This is not a hypothetical concern. India has lived through this before. The liberalisation of edible oil imports in the 1990s, following pressure under structural adjustment conditions, led to the near-collapse of domestic oilseed farming. Mustard, groundnut, and sunflower cultivation contracted sharply. Rural incomes in oilseed-growing regions suffered for years. The government of the day had offered similar assurances. The market told a different story.

Farmers’ organisations are also deeply sceptical of the “safeguard” mechanisms the government is citing. Trade safeguards, in practice, are difficult to trigger and slow to deploy. By the time a surge in imports is officially recognised, documented, and acted upon through the relevant dispute mechanism, domestic producers have already absorbed the damage. Small farmers operating on thin margins and seasonal credit cycles cannot wait out a two-year adjudication process at a trade tribunal. They lose their land, default on loans, and exit farming. The safeguard arrives, if it arrives at all, to an already-emptied field.

There is also a legitimate concern about what this deal signals for future negotiations. The interim framework is precisely that: a framework. It establishes the architecture for a fuller bilateral trade agreement that is expected to follow. Once India has accepted the principle of agricultural market access for American produce, even in limited form, it becomes extraordinarily difficult to walk that back in subsequent rounds. Trade negotiators know this. Farmers know this. The government’s insistence that the current concessions are limited and reversible is, at best, naive about how trade diplomacy actually works.

What, then, do the farmers want? Their demands are not simply a blanket rejection of global trade. The major farmer organisations, including those affiliated with politically diverse constituencies, have coalesced around several specific asks. First, they want the government to codify a legal guarantee of Minimum Support Price for all 23 notified crops, backed by procurement. This demand predates the current agitation, but the trade deal has renewed its urgency. If import competition is to be allowed, farmers argue, the state must guarantee a floor price to prevent catastrophic income collapse.

Second, they want full transparency in the negotiation process. The interim framework was signed without any public consultation with farmer groups, state governments with large agricultural constituencies, or parliamentary committees. In a country where agriculture is a state subject and over 40 percent of the workforce depends on farming, this opacity is not a procedural shortcoming. It is a democratic failure.

Third, they are demanding that the government take the question of American agricultural subsidies directly to the WTO, rather than treating it as background noise in bilateral talks. If the United States will not reduce its domestic farm support, India should not be offering market access to the products of that support. The asymmetry is not a trade-off. It is a structural injury.

The government is not wrong that India needs a trade relationship with the United States. American technology, investment, and market access for Indian goods in other sectors carry genuine strategic value. But these benefits cannot be paid for with the livelihoods of farmers who are already among the most economically vulnerable people in the country. A trade deal that hollows out rural incomes to cement a geopolitical partnership is not a bargain. It is a transfer of costs from the powerful to the poor.

When farmers burn symbolic copies of a trade deal, they are not asking to be protected from the world. They are asking to be consulted before their futures are negotiated away. That is not an unreasonable demand. The government’s assurances will remain hollow until it earns the credibility to back them up, and credibility in agricultural policy is not built with press conferences. It is built with procurement, with prices, and with a demonstrated willingness to put farmers’ interests on the table alongside everything else.