US Access to Indian Market for Key Crops

March 25, 2025

The United States is keen to enhance its access to the Indian market for three crops – soybean, corn, and cotton. This interest intensified following statements from former US President Donald Trump, who threatened to impose equal tariffs on Indian exports. The US agricultural sector has historically relied on exports, with a total value of nearly $62 billion in 2022. Recent shifts in global trade dynamics have made India a potential new market for these crops.

Changing Trade Dynamics

China has been the largest importer of US soybeans and cotton, but its purchases have sharply declined between 2022 and 2024. Soybean imports dropped from $17.9 billion to $12.8 billion, while cotton imports fell from $2.9 billion to $1.5 billion. Corn imports from the US also plummeted from $5.2 billion to $328 million. In contrast, Mexico and Japan have emerged as leading buyers of US corn, prompting the US to look towards India as a new opportunity.

India’s Growing Demand for Animal Products

A report from the US Department of Agriculture (USDA) indicates that India’s consumption of animal products is expected to rise due to population growth and increasing per capita GDP. This growth will likely drive demand for feed, including corn and soybean, by the early 2030s. Projections suggest that India’s domestic corn consumption could reach 98 million tonnes by 2040 and 200.2 million tonnes by 2050 under rapid income growth scenarios.

Import Projections for Corn and Soybean

India’s projected imports of corn and soybean meal indicate substantial demand. Under a rapid growth scenario, imports might reach 46 million tonnes of corn and 19 million tonnes of soybean meal by 2040. If growth is moderate, these figures drop , denoting the importance of economic conditions on import needs. Currently, India imposes a 45% customs duty on soybean and 50% on corn, alongside restrictions on genetically modified products.

Transformation in Cotton Trade

The US was once the leading cotton exporter but has recently been overtaken by Brazil. India’s cotton production has fluctuated, declining to a 16-year low of 29.9 million bales. The introduction of genetically modified cotton hybrids initially boosted production. However, the lack of new GM technology approvals has led to a decline in yields. India is projected to import 3 million bales of cotton in 2024-25, an opportunity for US exports to grow.

Impact on Indian Agriculture

The potential increase in imports of corn, soybean, and cotton poses both opportunities and challenges for Indian agriculture. While it could enhance food security and support the livestock sector, it also raises concerns about dependency on foreign crops. The shift from a net exporter to a net importer of cotton further complicates the agricultural landscape in India.

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