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Key Points

The United States has imposed steep tariffs on Indian goods while demanding greater access to India's agricultural markets. A Bank of Baroda analysis reveals that global wholesale prices are significantly lower than Indian prices for commodities like mustard oil and wheat. However, Indian consumers currently benefit from cheaper retail prices compared to American consumers for most products. The report cautions that removing import duties could flood Indian markets with cheaper foreign goods, threatening the livelihoods of millions of farmers.

Key Points: US Tariff Demands Threaten Indian Farmers Bank of Baroda Warns

  • US demands lower Indian duties on corn, cotton, almonds and soybeans
  • Wholesale global prices significantly lower than Indian prices for key commodities
  • Indian retail prices remain cheaper than US counterparts for most goods
  • Agriculture supports 40% of population and contributes 16% to GDP
3 min read

India's farmers will face pressures if free flow of US products allowed: Bank of Baroda report

Bank of Baroda report warns US trade pressure for lower duties on farm goods could flood Indian markets with cheaper imports, risking farmer livelihoods and agriculture sector stability.

"If India were to remove duties or lower them substantially, imports would come in larger quantities which will affect livelihoods in the farming sector - Bank of Baroda Report"

New Delhi, September 1

India's agriculture sector faces a delicate balancing act as the United States raises tariffs and presses for broader access to Indian markets. The Bank of Baroda has conducted an analysis by comparing the wholesale and retail prices of various commodities to shed light on how the opening of imports of farm products could affect overall demand and, consequently, the prospects of Indian farmers.

By the end of July 2025, the US imposed a baseline tariff of 25 per cent on imports from India, followed by an additional 25 per cent levy, effectively doubling tariffs to 50 per cent, which came into effect on August 27.

According to the Bank of Baroda report, Washington has also demanded greater access to India's dairy, fishery, and agriculture markets, along with lower duties on corn, cotton, almonds, and soybeans, and the removal of restrictions on genetically modified produce.

The Indian government, however, has maintained that the interests of farmers will not be compromised at any cost

The Bank of Baroda study, authored by economist Jahnavi Prabhakar, highlighted stark differences between wholesale and retail pricing trends.

At the wholesale level, global prices for oils, pulses, wheat, maize, and milk are significantly lower than Indian prices.

For instance, mustard oil, a widely used commodity, trades at Rs 16,866 per quintal domestically compared to Rs 10,340 globally, while wheat is Rs 3,074 in India versus Rs 1,916 internationally.

At the retail level, however, Indian consumers generally pay less.

"It has been largely observed that for most of the commodities, the retail prices in India are relatively cheaper than its US counterparts," it said.

A kilogram of white bread costs Rs 100 in India against Rs 300 in the US, while milk is Rs 65 per litre in India versus Rs 194 in the US.

Exceptions exist, such as apples, which are cheaper in the US.

This contrast means that while bulk buyers like processors might prefer cheaper imports, everyday consumers in India still benefit from relatively lower domestic retail prices, it asserted.

The report, in a way, cautioned that removing or slashing tariffs could "affect livelihoods in the farming sector," as cheaper imports would enter in larger quantities.

"...it is a pertinent point that if India were to remove duties or lower them substantially, imports would come in larger quantities which will affect livelihoods in the farming sector," it said.

India's agriculture sector contributes 16 per cent to the GDP and provides livelihood to more than 40 per cent of the population.

The sector has grown at an average pace of 4.5 per cent over the last 5 years in real terms.

With trade negotiations ongoing with the US, Bank of Baroda concludes that India's farm sector "is one which can be affected in case of free flow of imports," calling for "deeper consideration" before making concessions.

"It can be concluded that the agricultural sectors is one which can be affected in case of free flow of imports. The wholesale and retail prices comparison provide a dualistic picture. At the wholesale end, there is a case for imports coming in at lower prices in the absence of any duties. At the retail sid,e however, price comparisons do show that Indian products have more competitive prices. But given the strategies used by some of the global players to capture markets, unhindered flow of imports needs deeper consideration," it concluded.

- ANI

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Reader Comments

P
Priya S
Interesting how retail prices are lower here despite higher wholesale costs. Shows our supply chain is more efficient than we give credit for. But yes, we must protect our farmers first!
M
Michael C
As someone working in agri-business, I see both sides. Competitive pricing benefits consumers, but we can't sacrifice our food security. Maybe phased approach with safeguards for vulnerable crops?
A
Ananya R
No to GM foods! Our traditional crops are healthier and sustainable. Western corporations just want to capture our markets and make us dependent on their seeds. Stand strong India!
V
Vikram M
The 50% tariff by US shows their protectionist approach. Why should we open our markets when they're closing theirs? Tit for tat is necessary in trade negotiations.
S
Sarah B
While protection is important, we also need to modernize our farming practices to become globally competitive. Maybe this pressure will push for much-needed reforms in agriculture sector?

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