Armed With Robust Subsidies, US Farm Producers To Flood Indian Market With Cheaper Goods

Prime Minister Narendra Modi and his ministers in the Government as also loyal experts are having a pathetic time in explaining the great benefits that the Indo-US Trade Deal are conferring to India, especially the agricultural sector which is one of the major focus area of the US President Donald Trump.

Commerce Minister Piyush Goyal is acting like a big joker as he is saying in his stage managed interviews to the media on a daily basis that our Prime Minister has done a wonderful job in extracting maximum benefits from a recalcitrant Donald Trump. He is saying all these when the intricacies of the full deal will only be available by the middle of March this year and Trump has already said that the US has the right to make changes any time if he is not satisfied. This is on line with the earlier Trump assertion “I am the law, I decide what is right or wrong”

Let me mention here of a personal anecdote which will help in explaining the massive strength of the American farm lobby in influencing its own government and also the global farm trade. In 1999 December I attended the World Trade Organisation (WTO) ministerial meeting from November 30 to December 3 in Seattle in USA as a part of the media delegation of the Indian government. President of USA was Bill Clinton and he addressed the conference calling for complete abolition of subsidies by the European Union countries. On the contrary, EU demanded that the US must reduce its farm subsidies since the amount was staggering 50 per cent of the US budget and the total US farm subsidies in 1999 was 85 per cent of the total global farm subsidies amount.

The two warring sides failed to arrive at a compromise solution and finally the WTO conference collapsed without coming out with a joint declaration. I asked my American journalist friend why the US was so adamant on retaining all its subsidies? My friend replied — the next presidential elections are due in 2000 November. Clinton has promised the farm lobby that he will force the EU to curb the EU subsidies. But since he failed, it will have adverse impact for the Democratic Party in 2000 elections. Exactly the same thing happened. Republicans campaigned among the vast farming community of the USA that Clinton had surrendered to the EU and the farmers are losing. Democrats lost the 2000 November elections, junior George Bush was elected as the new President of the Republican Party.

Exactly, 26 years later, the scenario in USA is no different. President Trump is facing his midterm elections in November this year. The signals are not that bright. He badly needs to win to continue with his policies, a defeat in midterm means big restraint on his powers though he will remain president for two more years. The US farmers are the biggest voting base of any political party in USA. In 2024, the US farmers got a subsidy through government payments to the tune of $ 9.3 billion but in the first year of Trump, it went up to $42.4 billion more than four times in 2025. What a massive jump?

Now armed with these huge subsidies, the US farm producers will enter the burgeoning market for agri products in India and flood the domestic market with cheaper goods to throw out the Indian competitors. Piyush Goyal is talking of protecting the interests of the Indian farmers after allowing the big market access to the US producers. Bullshit. It is like talking of a level playing field by fielding a rich American shark with deep pockets and an Indian producer on the same turf. As happened in some of the Latin American countries, the US producers will in the first phase offer cheaper goods bringing smile to the consumers. Then when the locals are out, the US producers will raise the prices as the alternative has dried up. In India, the scenario may be not so bad, but the poor and middle level agriculturists will be hit.

The fact sheet on India-US deal released by the White House on Tuesday was later revised a bit but that does not alter the main focus of the deal which is totally favourable to the US and under which India gives Trump the right to tinkle with the agreement details whenever he feels. If this is not the surrender of the strategic autonomy, what is that? As this writer explained before in another piece, the Trump-Modi deal is a part of common sharing of views on geopolitics, especially relating to the security threat from China. It seems that the Prime Minister has been coerced to opt for the Asia-Pacific strategy of the USA.

That way, the leader of the opposition Rahul Gandhi is not off the mark when he accuses the Prime Minister of surrendering the interests of the 1.4 billion people of India. Our Prime Minister had a big opportunity to emerge taller as the real leader of the Global South. Unfortunately for the Indian nation, he has missed it and is now again following the old path wooing Trump at the cost of national interests? (IPA Service)