• 01 May, 2025

Welcome to India Edition, I’m Menaka Doshi. Join me each week for a ringside view of the billionaires, businesses and policy decisions behind India’s rise as an emerging economic powerhouse.

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This week: A food test for Modi and Trump, a noteworthy switch in the debt market and time is not kind to gold.

The Apple for Apples Trade

The trade gods seem to be smiling on India.

The country seems set to be among the first to sign a trade deal with the US, amid talk of “early mutual wins.” Meanwhile exporters – from electronics to apparel — claim to already be making gains due to trade diversion from China (though caveats apply, as I’ve explained earlier). Most notably, Apple aims to build most iPhones for US in India by the end of next year.

India will emerge as one of the key winners under Trump’s second term, as a beneficiary of the next round of supply-chain shifts, Nomura economists wrote in a report this week.

In return, India is ready to shop more Made in America goods — from Boeing planes to Lockheed Martin fighter jets, West Texas crude oil to Tennessee bourbon and Harley Davidson bikes to Tesla cars.

But the toughest sell for Trump will be in agriculture.

India’s farm sector provides livelihoods to over 45% of the population and contributes 16% to GDP, at least three times more than in the US.

Yet, farms here are much smaller, far less productive and less subsidized by some estimates, than American farms. They are also more protected.

India, a net food exporter, levies an average tariff rate of 39% on agricultural products versus 5% by the US, now an importer.

“There is not much scope for India to concede much on agriculture because our farmers are too distressed to be exposed to cheap imports,” said Siraj Hussain, former agriculture secretary to the central government.

On the face of it, the Trump administration wants the whole gamut of India’s farm sector policies reviewed – from tariffs to minimum support prices to the bar on genetically modified crops and sanitary regulations. But experts expect the negotiations to come down to a few key items such as American exports of soya bean, corn (maize), wheat, cotton, dairy products, seafood, poultry (chicken legs have been a contentious issue), livestock feed, ethanol, fruits and nuts among others.