WTO@30: Trade, Tariffs & Lessons From India's Agrarian Struggles 

The promise of the 1994 Uruguay Round — which brought agriculture under global trade rules — feels like a distant dream today. With the US President Donald Trump’s latest tariff salvos, erratic climate patterns battering crops, and a stalled WTO negotiation — approximately 47 per cent of India's population is directly dependent on agriculture for their livelihood, and employees of India's US$ 48.2 billion export sector in FY 2024-25 — are on the edge. 

In 1994, as the US and EU brought agriculture under the General Agreement on Tariffs and Trade (GATT) — India, which had newly liberalised its economy — took its first cautious step towards integrating with global trade. The Uruguay Round Agreement on Agriculture (URAA) was dubbed a “quantum leap”, though its modest commitments left room for developing nations to ensure food security.

China’s 2001 WTO entry and the rise of BRICS nations, including India, shifted the power balance. India joined Brazil in the G20 to challenge the subsidies by rich nations, but the start of the 1999 round was marred by protests in the host city of Seattle, hinting at growing unease with globalisation.

Since then, progress has fizzled. The 2015 Nairobi deal scrapped export subsidies, a relief for India, but ignored export restrictions, a lifeline during food shortages.

The WTO’s dispute settlement body, once a watchdog, weakened in 2019 when the US blocked appellate body appointments, a trend worsening under Trump 2.0. By 2025, preparations for the 2026 WTO Ministerial Conference (MC14) in Cameroon, stalled, with India pushing for public stockholding resolutions amid US demands for market access.

Shifting Trade Debates 

Trade debates have shifted from the 1990s to focus on efficiency, welfare, and distributional gains from liberalisation. Agriculture is now increasingly portrayed as part of a “broken” food system, implicated in malnutrition, environmental degradation, and greenhouse gas emissions.

In India, this framing resonates with widespread farmer protests against market reforms and fuels the self-reliance agenda of Atmanirbhar Bharat. Nevertheless, the trade benefits remain unquestioned, as basmati rice and spices exports continue to lift farm incomes and sustain rural livelihoods.

The situation took a serious turn when Trump’s so-called “Liberation Day” tariffs, introduced through Executive Order 14257 in April 2025, imposed duties ranging from 10 per cent to 50 per cent on countries with trade imbalances or political disagreements. India was hit with the maximum 25 per cent tariff from August 7, followed by an additional 25 per cent on August 27 in retaliation for its purchase of Russian oil, amid the Ukraine conflict.

Commerce Minister Piyush Goyal described the move as “deeply regrettable”. He also warned that it endangered US$ 3.47 billion in US agricultural exports to India. Moreover, bilateral trade negotiations quickly collapsed after US demands for dairy market access were denied. 

These trade shocks are compounded by climate change. The 2025 monsoon brought erratic rainfall and extreme heat, disrupting wheat and rice cycles. Projections suggest wheat yields could fall by 6-10 per cent for every 1 degree centigrade rise in temperature, with nearly 60 per cent of India’s farmland at risk by year-end.

Further, without effective adaptation, rice production could decline by 20 per cent by 2050. Rice export bans (2023) and pulse shortages (2025) underscore the food system’s vulnerabilities, while water scarcity has raised reliance on imports of edible oils up to 60 per cent of demand. Although more than 60 per cent of farmers have begun adopting climate-resilient seed varieties, adaptation remains uneven.

Way Forward: Self-Reliant Village Economy

Domestically, farmers’ unrest continues to simmer. In 2024-25, protests reignited over demands for legally guaranteed MSPs across all crops, echoing the movement that overturned the farm laws in 2020-21. This was coupled with “Quit WTO” slogans, highway blockades, and agrarian nostalgia for a self-reliant village economy.

Globally, waning trust in open markets has accelerated the shift toward “friendshoring” — a policy of sourcing raw materials from geopolitical allies, even as India’s trade deficit reached US$ 18.8 billion in June 2025, with imports (US$ 53.9 billion) far exceeding exports (US$ 35.1 billion).

On soybean imports, India has pivoted decisively from the US to Brazil, while free trade agreements with the UK and European Free Trade Association target agricultural trade expansion worth US$ 34.29 billion. These arrangements often tie trade to strategic or security concerns, creating long-term inefficiencies.

Resilient Global Trading System

Despite turbulence, signs of resilience persist. The global trading system absorbed shocks from the Ukraine war and Covid-19 without collapsing; in fact, India managed to export wheat during periods of high global prices. Moreover, India’s comparative strength and services trade remain largely unaffected.

However, the declining share of the US in global merchandise trade limits the reach of its protectionism. Moreover, Trump’s recent tariff policies may eventually backfire, as US consumers grapple with higher prices for products such as spices and tea. Inflationary pressures or financial market reactions could also force a reversal.

Meanwhile, the WTO limps on. Plurilateral initiatives such as the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) keep part of the dispute settlement process alive, while the Fisheries Agreement (not strictly a trade deal) signals that multilateral cooperation is not entirely moribund.

Preparations for MC14 in June 2025 yielded modest progress, with India hosting workshops on food insecurity. On the domestic front, digital farming adoption rose by 40 per cent in 2025, and the Union Budget allocated funds for regenerative agriculture and low-methane certification programmes.

Agricultural exports remained robust, hitting US$ 36.26 billion between April and December 2024, with rice exports alone projected at US$ 10 billion for FY25. Analysts argue that if countries present a united front rather than negotiating fragmented bilateral deals, Trump’s tariff shock could be mitigated, with India (as BRICS chair) playing a pivotal role in championing equity.

Challenges Ahead For Policymakers

For policymakers, the challenges are formidable. Targeted schemes such as PM-Kisan are more effective than blanket protection, while investments in horticulture can address malnutrition without erecting barriers. Multilateralism remains the best option for poorer countries, and the current policy chaos reinforces this.

Analytical tools must also evolve. For instance, global value chain models capable of identifying vulnerabilities in fertilisers, edible oils, and other critical inputs are far more relevant than traditional marginal adjustment models.

Finally, political economy factors must be foregrounded. Farmers must organise effectively because their stakes are concentrated, while consumers remain “rationally ignorant.” 

Agriculture has long been a stumbling block in trade negotiations. Now, the challenge has outgrown agriculture, engulfing the entire global goods trade system. India’s experiences, balancing subsidies with climate resilience and pressing for fairer deals, offer lessons for shaping global policy.

As the MC14 approaches, the priorities are clear: Secure a resolution on public stockholding, push for climate financing, and ensure farmer voices are heard. Armed with strategic foresight and determination, India can navigate these uncharted waters to ensure that trade reinforces the foundation of its agrarian economy.

(Chakradhar is Assistant Professor of Economics at Centre for Economic and Social Studies, Hyderabad. Gupta is Associate Professor at Rukmini Devi Institute of Advanced Studies, Delhi. Views are personal)