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India-US Trade War: A Battle for Economic Sovereignty and Farmers' Interests

Strategic Insights

— 2 min read

The ongoing India-US trade war has taken a political dimension, with the outcome having personal implications for Indian Prime Minister Narendra Modi and US President Donald Trump. The dispute centers around the US demand for market access to India's agriculture and dairy sectors, which has been met with resistance from the Indian government. The US farmers' lobby, a powerful force in US politics, is pressuring Trump to secure a trade deal that would grant them access to the vast Indian market of 1.42 billion people.

Key Takeaways:

  • The US farmers' lobby is a significant force in US politics, with big political lobbies in the US Congress covering both Republicans and Democrats.
  • The appeasement of the US farmers lobby is a distinct part of the Republicans' election strategy, especially in swing states.
  • Trump is under tremendous pressure from the US farm lobby to secure a trade deal that grants market access to Indian agriculture and dairy sectors.
  • The Indian government, led by Prime Minister Narendra Modi, is resistant to granting market access to Indian agriculture and dairy sectors, fearing the impact on small Indian farmers.
  • The Global Trade Research Initiative (GTRI) has cautioned that permanent reduction of agricultural tariffs in the India-US free trade agreement could result in subsidised US grains overwhelming Indian markets during global price downturns.
  • Indian exports to the US in 2024 totalled US$ 78 billion, with 55% of it being impacted by the Trump tariff of 25% and 50% from August 27.
  • The labour-intensive sectors like textiles, apparels, gems, and jewellery have been impacted the most, with one lakh gem jewellery workers already affected in Surat.
  • Prime Minister Narendra Modi has to take all factors into account, including the impact on Indian economy, employment situation, and farmers' interests.

Statistics:

  • 78 billion: Indian exports to the US in 2024
  • 55%: The percentage of Indian exports to the US that will be impacted by the Trump tariff of 25% and 50% from August 27
  • 18.4%: The percentage of GVA at current prices during 2022-23 that agriculture and allied activities account for
  • 54.6%: The percentage of the total Indian workforce employed in the agriculture sector
  • 1.08 hectares: The average size of an Indian farm, compared to 187 hectares in the US
  • 2-3: The average herd size in India, compared to hundreds in the US
  • $160 per tonne: The global grain price that plummeted between 2014 and 2016, devastating African farmers
  • 50%: The additional tariff that will be imposed on Indian exports to the US from August 27

Sources:

  • The Northlines, distributed by Contify.com (Copyright 2025)
  • Global Trade Research Initiative (GTRI)

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