Negotiations between Washington and New Delhi are intensifying as agricultural trade takes center stage. US President Donald Trump said this week that his recent conversation with Indian Prime Minister Narendra Modi focused largely on trade relations. Modi reportedly assured Trump that India would scale back oil imports from Russia, a move that could pave the way for a long-awaited trade deal between the two nations, according to Reuters.
The US imposed new sanctions on Russia’s leading oil producers on Wednesday, prompting Indian refiners previously among the biggest buyers of discounted Russian crude to signal steep cuts in future purchases. This shift could remove one of the key barriers to a bilateral trade agreement, long stalled by energy and tariff disputes.
India currently faces tariffs as high as 50% on exports to the United States, with half of those duties linked to its energy trade with Moscow. The high levies have weighed heavily on industries such as textiles, jewelry, seafood, leather, and engineering sectors that collectively employ millions. Reports suggest Washington may reduce these tariffs to around 15–16% in exchange for concessions on agriculture and energy.
US officials are pushing India to open its market to American corn and soybeans, products that have become a focal point in the discussions. India’s growing ethanol industry relies on corn, but current regulations prohibit ethanol made from imported grains and ban genetically modified (GM) crops. Since most US corn is GM, Washington has proposed a compromise: allowing corn imports exclusively for ethanol production, ensuring they would not enter India’s food chain.
The Trump administration is eager to find new buyers for US soybeans and soymeal after trade tensions with China sharply reduced exports. With China the world’s largest soybean importer turning elsewhere, American farmers have been left with large surpluses. The US sees India, home to the world’s largest cattle population, as a promising market for soymeal, a key source of animal feed protein.
New Delhi remains cautious about opening its agricultural markets. Officials have cited the need to protect smallholder farmers and prevent disruptions to domestic supply chains. While sources suggest India might consider limited imports of corn and soymeal, the country’s soybean processors strongly oppose the idea, warning that it would undercut local producers and destabilize prices.
Ethanol producers have also resisted corn imports, arguing that domestic production capacity already exceeds consumption and that foreign grain shipments could destabilize the sector. With state elections approaching in Bihar a major corn-producing region allowing US corn imports could spark backlash among farmers, a politically influential group that New Delhi can ill afford to alienate.
