As India and the United States move closer to finalizing a bilateral trade agreement, certain domestic agri-industries in India are raising red flags. With the July 9 deadline for re-imposing the US’s reciprocal tariffs—originally initiated under President Donald Trump—fast approaching, the pressure to strike a deal is mounting. But so are concerns from within India’s sugar and soyabean processing industries.
🚫 Sugar Sector Says No to Ethanol Imports
One of the most vocal opponents of the potential trade concessions is India’s sugar industry. At the heart of its resistance is the possibility of allowing imports of ethanol for fuel blending, a move that could threaten domestic sugar mills that depend heavily on ethanol production for revenue diversification. India has committed to an ambitious 20% ethanol blending target with petrol by 2025, which has driven investment in domestic ethanol capacity. Importing cheaper US ethanol—produced largely from genetically modified (GM) corn—could disrupt the economics for Indian sugar mills and dilute their market share. In addition, mills are hesitant to support the import of GM maize (corn) for ethanol production, given consumer and regulatory sensitivity around genetically modified crops in India. The US is the largest producer and exporter of both ethanol and GM corn.
🌱 Soyabean Processors Fear GM Imports
Equally concerned is the soyabean processing industry. The Soybean Processors Association of India (SOPA), based in Indore, has strongly opposed any move to allow imports of soyabeans, especially genetically modified ones, from the United States. India currently does not allow cultivation of GM soyabean, and while imports of soyabean oil are permitted, the beans themselves remain restricted. With the US being the second-largest producer of soyabean globally (after Brazil) and growing almost exclusively GM varieties, opening up Indian markets could severely undermine local processors and farmers, according to SOPA. The domestic soyabean industry in India is already dealing with price volatility, high input costs, and low yields. The entry of cheaper, GM soyabean imports may further strain margins and could render domestic processing non-viable for many players.
🌐 Geopolitical Factors at Play
The broader context of this trade negotiation is the US’s search for alternative export markets to China amid ongoing geopolitical tensions. Agriculture—particularly corn, soyabean, and ethanol—is a critical export sector for the US, and India presents a potentially lucrative, untapped market. Trade experts suggest that the US is pushing India to lift import restrictions on these agri commodities as part of a larger trade normalization deal. However, the political and economic risks associated with such concessions are triggering resistance from Indian stakeholders.
🛑 Resistance Grows Ahead of Deadline
As the clock ticks toward the July 9 deadline, Indian policymakers face a balancing act—strengthening diplomatic and trade ties with the US while protecting vulnerable domestic industries from potential fallout. The resistance from sugar and soyabean processors may complicate negotiations, especially if trade-offs involve sensitive commodities tied to farmer livelihoods and India’s food security strategies.
✅ Key Takeaway
While a comprehensive India–US trade agreement could open new doors for economic cooperation, not all sectors are onboard. The sugar and soyabean industries have drawn a clear line against ethanol and GM crop imports, citing threats to domestic sustainability, competitiveness, and farmer welfare. How the Indian government navigates these conflicting interests will be crucial in shaping the outcome of one of the most closely watched trade discussions of the year.
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