00:00Okay, let's then turn to the critical issue of that trade deal, likely impending trade
00:06deal, which is agriculture.
00:08Lots of questions.
00:09Whether India's markets are going to be open now to U.S. agricultural products, is that
00:13a good thing or not?
00:15What could be the implications?
00:16Who better to answer that than the country's leading expert on agriculture, distinguished
00:21professor of agriculture at ICRIA, Professor Ashok Gulati, appreciate your joining us.
00:26During the Indo-U.S. trade deal, one red line and the one uncertainty is over agriculture,
00:32particularly after comments from the U.S. Agriculture Secretary and other officials saying
00:36that America will now get a huge benefit of access to our markets of agriculture products.
00:42Should that worry Indian farmers if the U.S. gets unlimited access to Indian markets for
00:47their agriculture produce?
00:49Well, as they say, the devil is in the details and we don't know the details.
00:57So it's a little premature to comment on that.
01:01But overall, I would say my feeling is, and whatever I'm reading from the two sides, is
01:09that there would be those commodities which are opened, which are not very much produced
01:18in India.
01:20You know, I'll give you the example of almonds have been come from U.S.
01:26almost 90% of what you're consuming in the country is coming from California at a duty
01:31of about 13-14%, whereas walnuts have a duty of 100%.
01:38What is the rationale of that?
01:40I don't understand.
01:41So their interest is on many dry fruits, cranberry and all that.
01:47The big issue is in case of soybean, corn and dairy products, if at all.
01:54And that is an issue of GM and non-vegetarian cows there.
01:59So would you draw a red line, particularly on genetically modified soya bean and corn?
02:05Would you say that the Indian negotiators have to say that that is an area India is not ready
02:10to concede to U.S. demand to allow corn, GM, corn and soya bean easy access to Indian markets
02:16or ethanol?
02:18You know, it's always a give and take.
02:20And I feel in trade deal, you can't take one stand.
02:25No, nothing will come.
02:27There's, that's an extreme position.
02:29Then how do we get access to our labor intensive products like textiles or leather goods or gems
02:36and jewelry and even our shims?
02:39You know, if they attract 50% duty, we were gone, literally.
02:45So I think it's always a give and take.
02:48Now the issue of GM, you know, the GM has been in our food system since 2002.
02:56Mr. Atal Bihari Vajpayee opened up BT Cotton and our production, which was 13 million bales at that time,
03:05jumped to 39 million bales within 10 years.
03:08And the seed of cotton is in the food system, both for animal feed, poultry feed, as well as cotton seed oil.
03:20And soya bean oil is coming from U.S. in any case.
03:24So, you know, saying that nothing of soya will come, soya bean oil is already coming.
03:29But whether soya bean can come, how much quantity, at what tariff rate, that is all a matter of negotiation.
03:38And I'm sure our negotiators have taken care of that.
03:43You know, you're saying that you're confident our negotiators have taken care of that.
03:47But is there a sense that eventually this could become a very uneven battle, given the sheer power of the U.S. agricultural market,
03:54daring, for example, another area where India is saying that they will draw a red line.
03:59Can India and Indian farmers really compete with high-tech American farmers when it comes to agriculture?
04:05You know, 80% of our products are very competitive.
04:11In fact, we could be exporting.
04:13So, agriculture is not a gone case.
04:16It's a very efficient sector, except edible oils and that too for palm.
04:21That is the cheapest oil in the world.
04:24And that's coming from Indonesia and Malaysia.
04:27A bit of pulses.
04:30You know, the statements that I read from the two ends,
04:32our ministers are saying they have fully protected the smallholders and agriculture will not be impacted.
04:40But when I read the U.S. Secretary of Agriculture and they say,
04:45oh, we are going to flood the Indian market and so on and so forth.
04:50I trust my own ministers more than what the tweets are from the U.S. side.
04:56So, if there is a quota and gradually the tariffs are reduced,
05:03that is the way things have to be in every sector.
05:07Agriculture is not very different on that account.
05:10In a sense though, Professor Gulati,
05:13is this a time and opportunity for Indian agriculture to reform?
05:16Given the challenges I said that exist from U.S. agriculture,
05:20there will be opportunities.
05:21Do you believe that a debate should start on agri-reform or do you believe it's a political hot potato
05:27that no one will touch after what happened to the government's earlier plans for agriculture reform?
05:32I would say the reforms in agriculture are overdue.
05:40And it was good to see after, you know,
05:44President Trump's tariffs threat and so on and so forth,
05:49when he had raised it to 50 percent,
05:51Indian government got into action
05:53and did a lot of reforms of GST
05:57and doing his business and so on and so forth.
06:01So, you know, sometimes when you are faced with a challenging time,
06:08that's the time to reform and come out successfully.
06:13And I think Modi government has done pretty good coming out of this 50 percent tariff.
06:21Our exports have not dropped drastically, no hue and cry on that front.
06:25And our growth rate has sustained unexpectedly more than what perhaps any economist,
06:33or at least I never expected 7.4 percent growth rate in GDP would be there.
06:38And they have achieved that.
06:40So, we have to give some credit, whatever they have done in the face of these challenges.
06:46Sir, but farming in India, I come back to the agriculture point.
06:50Farming in India remains largely unmechanized, small fragmented land holdings.
06:54They don't have very little scope for large machinery.
06:57U.S. farms, cutting-edge equipment, even now AI-driven technologies.
07:02How will... I come back to the mismatch.
07:05There are many who fear that we are entering a trade deal which could be one-sided.
07:10Do you believe these fears are exaggerated?
07:14These fears are exaggerated.
07:16I think our farmers, despite the small holding, have been our...
07:22We are, on agriculture basis, we are exporting about $6 billion to U.S.
07:27And our imports for last year, it was $2.5 billion.
07:33This year, perhaps it could be $3 billion.
07:35So, we are at trade surplus.
07:38Even in agriculture, with respect to U.S.
07:41And think about whatever stringent conditions of SPS and other things are.
07:47Our shrimps have been going, you know, $2 billion is shrimp exports.
07:51And overall, to the global market, India's exports of agriculture are $52 billion.
07:59And imports are $37 billion.
08:01So, we are a net exporter of agriculture.
08:04Whereas U.S., though it's a big exporter, but on the whole, it is a net importer of agriculture.
08:11Despite all their machinery, AI, and modern technologies, they are net importers of agriculture.
08:16China is the largest net importer of agriculture.
08:21India, of the big countries, is a net exporter of agriculture.
08:25So, there is something our farmers can do.
08:29Reassuring, you know, Professor, your words are reassuring.
08:32Educative as well.
08:34There are those, of course, who are saying this, the trade deals that we are signing, EU, America,
08:39all of this could be a 1991-like moment for trade.
08:44And possibly, some would argue for Indian agriculture.
08:48But do you really believe this is a 1991-like moment where we could turn adversity into opportunity?
08:56Well, we have to set our house in order.
08:59Our domestic reforms agenda has to be carried through.
09:03If you want to compete in the international market, you can't have all-around restrictions.
09:10You know, our wheat exports were banned in 2022, when the Ukraine war started.
09:17And it is still banned after almost four years coming.
09:22And it is banned.
09:24We could be exporting wheat.
09:28Professor Ashok Gulati, for shedding your wisdom.
09:32I always appreciate it.
09:33Once the details come out of the trade deal, we'll come back to you to tell us more of the impact on Indian agriculture.
09:40But for now, thank you so much for joining me tonight.
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