U.S.-India Trade Dispute Over Corn: Reasons Behind India's Reluctance to Purchase American Corn Despite Trump's Pressure
India-US trade negotiations have hit a roadblock, with the controversial issue of corn taking centre stage. The price discrepancy between the two countries is causing concern, as corn in India sells at Rs 22 to Rs 23 per kilogram, compared to less than Rs 15 per kilogram in the United States.
This price difference could have significant implications, particularly for Bihar, one of India's largest corn-producing states. If cheaper American corn were to flood the market, local farmers could face substantial losses.
The Indian government has drawn a firm line, stating that it will neither lift restrictions on genetically modified crops nor ease tariffs on corn imports. This stance is due to regulatory and safety concerns, as well as political and environmental considerations. As a result, India has excluded the import of genetically modified maize from the USA.
India's corn import policy has been a topic of discussion, with America's Commerce Secretary Howard Lutnick making sarcastic comments about the situation. The Indian government had initially considered allowing imports of American corn for ethanol production only, but political pushback quickly shelved the proposal.
The politics of corn in India have become inseparable from the economics, especially with elections approaching. Until the elections are over, there is little chance of movement on agricultural imports.
India has preferred to source maize from Myanmar and Ukraine instead of the United States, a decision influenced by the ban on genetically modified corn and the existing tariffs. This has resulted in India importing only a negligible amount of corn from the United States, with total imports amounting to 0.97 million tonnes in 2024-25.
The absence of American corn in India's imports has cast a shadow over wider trade negotiations. The overall US corn exports have fallen sharply, from $18.57 billion in 2022 to $13.7 billion in 2024, with Beijing also slashing corn imports from the United States.
The United States is now pressing harder to export its corn due to shrinking demand from China. India, with its booming demand for poultry feed, dairy, and ethanol production, is seen as a key untapped market. However, the current trade hurdles suggest that progress may be slow in the immediate term.
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