Have the interests of farmers been sacrificed?

Today, India and the United States are conducting a crucial round of trade negotiations to finalize the first tranche of their much-publicized bilateral trade deal. Officially, the discussions concern a technical and legal clean-up. In reality, they could determine whether the interests of India’s nearly 800 million vulnerable farmers are being quietly mortgaged on the altar of geopolitical opportunism.

Amid growing US pressure and public criticism of India’s subsidy regime, the central question remains unanswered: what substantive commitments has the Modi government already made under a combination of political, strategic and economic pressures?

Pressure on Indian policies

Last week, Washington stepped up what increasingly looks like a coordinated campaign against India’s agricultural policies. At the World Trade Organization Committee on Agriculture, the United States, joined by the Cairns Group of agricultural exporting countries, including Pakistan, organized an unprecedented denunciation exercise targeting India’s agricultural support programs.

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Notably, no country came to India’s defense. New Delhi found itself isolated and struggled to justify its policies.

Yet even as India faced criticism in Geneva, Union Commerce Minister Piyush Goyal publicly celebrated progress in trade talks with Washington. A US delegation is reportedly arriving for the final phase of talks, with most of the substantive issues already resolved and only technical and legal issues remaining to be concluded.

This statement should concern every Indian citizen.

Opacity troubles commercial negotiations

The Modi government has revealed almost nothing about any commitments it might have made in agriculture, services, pharmaceuticals or digital trade. Beyond occasional leaks and selective briefings, negotiations took place behind a wall of opacity. The public has been denied any meaningful understanding of proposed concessions in sectors that affect livelihoods, food security, employment and public health.

India’s 1.4 billion citizens – including around 800 million people who rely on agricultural support systems – are still largely unaware of what their government may have agreed to. This secrecy has only fueled speculation that considerations beyond trade, including broader strategic and commercial interests, could shape the negotiations.

The concerns are not hypothetical.

Concerns about the agricultural sector

For years, agricultural lobbies and U.S. lawmakers have relentlessly targeted India’s public stockpiles and minimum support price programs. Their goal is clear: dismantle policies that protect Indian farmers from market volatility and support national food security.

The main accusation against India is that it spends about $65 billion on agricultural support, of which about $25 billion is categorized as trade-distorting subsidies, with the rest falling under development-related support measures.

India has rejected these claims. Yet at the WTO meeting, even members of the G33 coalition of developing countries, such as Indonesia and China, remained silent. New Delhi’s diplomatic isolation was impossible to ignore.

Coordinated US policy push

The campaign against India is no longer limited to government channels. It increasingly looks like a coordinated effort combining official U.S. policy, congressional pressure, and private sector lobbying.

The warning signs were evident in remarks from Senator John Boozman, Chairman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry: “American rice and wheat producers continue to be the target of India’s massive, excessive subsidies, and there are countless other examples. This legislation will give us the tools to combat unfair practices and market manipulation by our trading partners to level the playing field and maintain a competitive edge in the marketplace worldwide.

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Such statements are not merely rhetorical. They signal a growing bipartisan determination in Washington to challenge India’s agricultural policies through trade instruments, legislation and potentially formal disputes.

Ironically, this comes from a country that itself lost a major WTO dispute over cotton subsidies.

Fighting at the WTO

The United States has also worked to develop a broader narrative portraying opposition to Indian subsidies as a global concern rather than a bilateral grievance. At the WTO, Washington brought in representatives from the American Rice Association and, significantly, Pakistan to argue that Indian support programs harm developed and developing country competitors, including agricultural exporters like Paraguay.

A side event organized by the US rice lobby became the focal point of the offensive. With the participation of US Trade Ambassador Joseph Barloon, speakers from Pakistan and the US Rice Association launched what observers described as a “highly localized attack on India”. Their argument was simple: they can compete with anyone except the Indian government.

But agriculture is only one front among others.

Expansion into services and technology

India faces growing challenges in trade in services, particularly in the area of ​​information technology. The Trump administration’s repeated attacks on H-1B visas suggest a continued effort to reduce foreign participation in the U.S. technology sector, despite Indian professionals’ substantial contributions to the U.S. economy and welfare system.

When it comes to digital trade, India has already backed away from its long-standing support for a flexible policy on tariffs on electronic transmissions. Under continued pressure, New Delhi could eventually approve a permanent moratorium that could deprive the country of tens of billions of dollars in future customs revenue.

The government’s aggressive promotion of tax incentives for AI-based data centers also raises difficult questions. Although presented as a modernization strategy, such policies could simultaneously reduce tax revenues and accelerate the layoffs of millions of people employed in India’s software services sector, as artificial intelligence automates routine functions.

Pharmaceutical industry faces growing pressure

The pharmaceutical sector presents another area of ​​vulnerability.

Prime Minister Narendra Modi frequently describes India as the “pharmacy of the world”. However, this status could be compromised if trade negotiations impose stricter intellectual property obligations, particularly with regard to patents and pharmaceutical innovation.

The timing is remarkable. A May 31 Wall Street Journal article, titled “Trump Wants Minerals, Health Data for Aid. African Nations Push Back,” describes how several African governments have resisted U.S. demands related to health aid.

According to the report, “Zimbabwe, Ghana and Zambia have said no or dragged out negotiations on the Trump administration’s self-proclaimed ‘America First’ foreign aid policy, which aims to more directly tie health aid to U.S. diplomatic and security goals.”

The report further notes that governments are resisting requests for access to private medical data and, in some cases, mineral resources.

Whether it is agriculture, digital commerce, pharmaceuticals or development aid, a common model is emerging: maximalist negotiation supported by overwhelming economic leverage.

Questions about political sovereignty

The uncomfortable possibility is that India has already diluted – or abandoned – many of its long-held positions under similar pressures.

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Trade agreements are often presented as instruments of growth and strategic partnership. But they can also become vehicles for asymmetric concessions when one party negotiates from a position of overwhelming power and the other from a position of political emergency.

History offers a lesson in caution. Siraj-ud-Daulah resisted the encroachment of the East India Company until the balance of power shifted irreversibly in his favor.

Today’s circumstances are very different, but the underlying question remains familiar: Can India preserve its political sovereignty in the face of external pressures, or is it quietly ceding ground to the world’s predatory hegemony?

The answer may emerge not from today’s public announcements, but from the commitments buried deep in the deal’s fine print.

(The Fed seeks to present views and opinions from all sides of the spectrum. Any information, ideas or opinions contained in articles are those of the author and do not necessarily reflect the views of The Fed.)