With India’s farm exports dropping for the second consecutive year, it seeks to work closely with the US to bolster its farm trade processes as non-tariff issues continue to remain in focus. India is trying to gain more access to the US markets and less non-tariff barriers for its farm items. India has been focusing on expanding its product basket for exports. The US was India’s largest farm export destination during April-November 2015.
In the Union Budget 2016, the Indian government announced that it sought to double farm income in the next five years. Agriculture and allied services in India contribute about 18.5 per cent of GDP and employ about 58 per cent of the workforce. The budget placed a renewed focus on the farm sector to revive agriculture growth and improve farm incomes at a time when rural India is going through a period of distress.
To increase crop yields in rain-fed areas, the government allocated Rs.412 crore ($62 million approx) towards organic farming in the budget. US is India’s sixth-biggest import market of agricultural products, according to the commerce ministry. Some of India’s exports to the US include rice, casein, honey, processed fruit and vegetables. The US accounted for nearly 11 percent of India’s farm exports in 2014-15.
In the Trade Policy Forum meeting held between the two countries in October 2015, both sides agreed to focus on exploring the possibility of enhanced market access on identified agricultural products. India’s farm exports are facing prohibitive import duties in overseas markets. Some of the cases include dairy products, which attract peak import duties of 511 per cent in the EU, 93 per cent in the US, and 692 per cent in Japan.
While India has traditionally been accused of being too protectionist over agricultural and food products, the US is one of the top farm subsidisers.
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