🌽 Trade Tangles: India vs US Over Corn & Ethanol 🚫🛢️

U.S. Commerce Secretary Howard Lutnick criticized India’s trade barriers, asking rhetorically: “Why won’t 1.4 billion people buy one bushel of U.S. corn?”
India imposes a 15% tariff on maize imports up to 0.5 million tonnes; beyond that, a high 50% duty kicks in.
A bigger barrier: India prohibits import of GM (genetically modified) maize, which is problematic because ~94% of U.S. corn is GM.
As a result, U.S. corn exports to India remain extremely limited (just ~1,100 tonnes in recent years) despite rising demand in India for feed, ethanol, and livestock sectors.
Analysts see this corn issue as symbolic of deeper agricultural trade frictions between the two nations.

India currently bans ethanol imports for fuel use and applies heavy duties even for non‑fuel uses.
The U.S. Trade Representative (USTR) has flagged India’s ethanol ban as an “unfair trade practice” in its 2025 National Trade Estimate, citing it as one of 10 major trade barriers.
As part of broader trade talks, India is reportedly reviewing U.S. requests to lift ethanol import restrictions.
But domestic stakeholders push back: the Indian Sugar & Bio‑energy Manufacturers Association (ISMA) has urged the government to ban ethanol imports, warning that allowing them would jeopardize sugarcane farmers’ incomes and local ethanol industry viability.
In proposed bilateral trade agreement (BTA) talks, the U.S. is expected to push for concessions in ethanol, along with agri and dairy.
One potential compromise: importing non-GM corn / ethanol for fuel use only (i.e. not entering the human food chain). Some Indian officials have floated that possibility.

India views agriculture, especially corn, dairy, and ethanol, as “red lines” that it will defend in trade negotiations.
A senior trade ministry source said that India would resist demands to open markets for wheat, dairy, and corn, even while offering tariff cuts on selected other U.S. goods.
The broader aim: finalize an interim trade agreement (before punitive U.S. tariffs potentially kick in) without undermining domestic agricultural interests.

India recently let 2G ethanol exports (from agricultural residues) under authorization and certification, signaling interest in promoting advanced biofuels.
India’s fuel exports are surging, aided by higher ethanol blending (from 12% to 20%) and stronger refining runs.
Some analysts warn that easing maize import barriers could lower domestic maize prices, harming farmers in maize‑growing states like Maharashtra and Madhya Pradesh.
In trade talks, the U.S. and India have reported progress, though key agricultural issues remain unresolved.
There is speculation that India might allow GM crop imports for animal feed / ethanol use only, though the country has firm biosafety constraints and significant political resistance.

Implications & Challenges

Farmer interests & domestic industry protection: India must tread carefully so as not to undermine its sugarcane, maize, and dairy farmers. Opening the door to cheaper U.S. corn or ethanol could put domestic producers at risk.
Biosafety & public acceptance of GM crops: The opposition to GM food imports is strong in India, which complicates any push by the U.S. to liberalize corn/ethanol access.
Fuel security & cost: Ethanol blending is a key part of India’s strategy to reduce crude import dependence and lower emissions. But balancing that with trade commitments is a delicate act.
Diplomatic & trade leverage: The U.S. is leveraging corn and ethanol access as bargaining chips in its broader push for market access in Indian agriculture.
Compromise paths: Partial liberalization (e.g. non-GM corn for ethanol, restricted use import licenses) may emerge as negotiated middle grounds.