📚The TL;DR📝

1. India: 1.4 billion people, governed by Prime Minister Narendra Modi since 2014. Borders China and Nepal to the northwest, Pakistan to the east, and Bangladesh and Myanmar to the west.

2. The United States and India are locked in a trade dispute, stemming from disagreements over Russian oil and persistent agricultural issues.

3. Owing to deep-rooted traditions, agricultural groups in both countries formed powerful lobbies that have made their weight felt in domestic and foreign affairs.

4. Over the past five years, negotiations have repeatedly stalled as each side protects domestic interests, even as cooperation in defense and technology has grown. In response, India has grown closer to China, despite their historic rivalry.

5. The unresolved trade conflict threatens American consumers and businesses, as well as farmers, whose livelihoods are threatened by China’s search for new trade partners in agricultural goods.

📌How Agricultural Lobbies Drive U.S.-India Trade Tensions📌

On September 8, 2025, just after the United States issued punishing 25% tariffs against India, Iowa Governor Kim Reynolds sat down with Indian External Affairs Minister S. Jaishankar in New Delhi. Their meeting was not about geopolitics or defense collaboration, but instead, the unlikely pair discussed soybeans, ethanol, and US-India relations. Foreign ministers rarely meet with sitting U.S governors on geopolitical matters, much less the governor of a state more than 450 times smaller than India.

These negotiations, however, come when the relationship once heralded as “the defining partnership of the 21st century” is at risk of falling apart. Growing American frustration over India’s agricultural protection has made other disagreements come to the fore. U.S. officials have lashed out at India’s purchases of oil from Russia, accusing them of prolonging the Russo-Ukrainian War. The U.S. has now implemented tariffs of 25% on nearly all Indian goods. The United States doubled down with an additional 25% tariff in response to India continuing to purchase Russian oil. Peter Navarro, Trump’s trade advisor, labeled the Ukraine war as “Modi’s War”. 

This conflict has broader implications. As distrust increases between the two sides, India has begun repairing its relationship with China. Chinese imports of American grain and soybeans have been falling while China looks to India as a potential trade partner. If the United States continues to lose China as an agricultural market while aggravating India, thousands of American farms risk going bankrupt, devastating the Midwest’s economy in the process. 

America’s Ag Lobby

Agriculture has long been at the cornerstone of the American economy and self-conception. The yeoman farmer’s interests were at the heart of Jeffersonian democracy in the early 1800s. The Jeffersonians imagined power resting with independent landholders rather than distant commercial elites. With the Homestead Act of 1862, the federal government invited settlers to claim new territory, turning vast plains into productive farmland and weaving millions of smallholders, many of whom were recent immigrants from Europe, into the country’s fabric. That same year, the U.S. Department of Agriculture created the first land-grant colleges, which transformed America by democratizing education in rural areas and pioneering scientific farming techniques.

American farmers gained influence during the 20th century. In 1919, farmers united to create the American Farm Bureau Federation, which lobbied Congress directly and spoke for farm interests nationwide. Farmers built grain elevators, dairy cooperatives, and local cotton gins to pool resources and negotiate better prices for their communities. The U.S. Department of Agriculture (USDA) simultaneously ensured that cost reductions reached even the most remote farms. When the Great Depression threatened to destroy farm income, farmers pleaded for relief. The government answered with subsidies to keep farms afloat, encouraging farmers to burn surplus crops and intervening in the market to stabilize prices. The bipartisan “Farm Bloc” was formed, giving farmers a voice in the Roosevelt administration.

During the Cold War, the American agriculture lobby became a heavyweight in policymaking. Congress created Food for Peace, a program designed to offload surplus U.S. crops as food aid to developing nations. Wheat, corn, and powdered milk from Kansas, Nebraska, and Iowa arrived in dozens of countries in the Global South. This was justified as good diplomacy because it kept countries away from Soviet influence, but it became a tool of Cold War coercion. When Egypt tilted closer to the Soviet Union, U.S. officials threatened to delay critical grain shipments that would have affected millions of people. 

During this time, America wielded its substantial agricultural power against a nascent Republic of India, even as India sought to maintain its status as a staunchly non-aligned country. In 1966, after criticizing the Vietnam War, India faced a U.S. grain embargo during a crushing drought in the northern regions of Bihar and Uttar Pradesh. Forced to reconsider its position, India adjusted its foreign policy, demonstrating how grain could act as leverage for American interests, especially during periods of geopolitical division. In the US, national commodity groups like the Corn and Soybean Associations became political heavyweights, using fees from farmers to support an aggressive advertising and lobbying push on Capitol Hill. Funded by “checkoff” programs, which collect mandatory fees from farmers at the time of crop sales, these associations pooled funds to support aggressive advertising, research, and lobbying efforts to promote agricultural interests. Their allies in Congress used their seniority to secure generous subsidies and steer the direction of U.S. farm policy for decades.

India’s Farmer Movement

When India won independence from Great Britain in 1947, over 80% of Indians lived in villages, and 75% relied on agriculture for their livelihood. Farming shaped both the economy and national identity—India’s first Five-Year Plans for economic development prioritized irrigation projects, fertilizer subsidies, and rural banks. Village councils, known as Panchayats, trained many of the country’s future leaders, and farmers helped set the agenda in the Lok Sabha, India’s parliament,  and on the local level, in state politics.

The Green Revolution of the 1960s and 1970s transformed Indian agriculture. With government support, India adopted wheat and rice varieties that offered high yields, expanded irrigation, and provided minimum price guarantees. The Northern states of Punjab, Haryana, and western Uttar Pradesh became national breadbaskets, and grain outputs grew at an astronomical pace. For example, Punjab’s wheat and rice output increased 1,000%  between 1950 and the mid-1980s, fueling rural prosperity and export capacity. More importantly, India was no longer beholden to foreign countries in times of food distress, becoming self-sufficient in its agriculture and making it one of the largest producers in the world. 

One of the most lasting impacts of the Green Revolution was that farmers deepened their influence and gained an unprecedented platform in Indian politics. The surpluses in the north created a prosperous class of cultivators that would, through unions like the Bharatiya Kisan Union (BKU) and All India Kisan Sabha, advocate for their interests assertively. During the 1980s, the BKU was a driving force behind the toppling of the incumbent Indian National Congress — a testament to their pervasive influence. These organizations launched influential movements that used strikes, road blockades, and mass rallies to push for higher minimum support prices and loan waivers that would benefit rural and farmer interests. 

The Limits of Agricultural Diplomacy

Beginning in the 1990s, the United States aggressively promoted agricultural free trade through a series of landmark agreements. To encourage reciprocal tariff reductions, the United States has since maintained relatively low average tariffs on agricultural imports, generally between 2% and 5%, while seeking comprehensive trade agreements.  At the World Trade Organization (WTO), U.S. negotiators vigorously pushed for global reductions in farm tariffs and subsidies, lobbying for American producers to access new markets worldwide. Each of these trade victories gave incumbents considerable domestic support, keeping politicians in office and ensuring that U.S. agriculture remained competitive on a global stage. 

India, by contrast, joined the WTO  in 1995 but continued to protect its agricultural sector, even as its tariffs in other industries fell after economic liberalization in the 1990s. Fears of rural upheaval and the vast number of smallholding farmowners meant the government kept high tariffs on wheat, rice, and dairy, while resisting any binding commitments to open its market further. Because of these pressures, India enforces some of the world’s highest tariff rates on key agricultural goods, often exceeding 35% for staple goods like wheat, rice, dairy, sugar, and edible oils. 

The rural vote, encompassing over 300 Lok Sabha seats out of a total of 543, determines success in national elections. Farmer unions and rural politicians feared that free trade would expose Indian agriculture to price shocks and threaten the livelihoods of their constituents. These voices could not be ignored, and India retained its protectionism and grassroots resistance to globalization with limited reforms.

These conflicts re-emerged during Donald Trump’s first term as U.S. President. In 2019, the U.S. withdrew India’s special trade privileges, citing India’s protectionist policies against U.S. agricultural exports, especially dairy and poultry. India responded with a higher tariff of their own on a slew of food products. While India offered to open up access to specific products, India’s farm lobby ensured a roadblock on any further developments. Indian Prime Minister Narendra Modi publicly stated that “the interests of our farmers are our top priority” and that their livelihoods would never be compromised. While trade relations on agriculture saw improvement during the Biden administration, progress was limited, and India maintained its high tariffs on farming and dairy products.

🌎Why It Matters🌎

After years simmering in the background, the conflict over agriculture has burst into the open, threatening what was once a robust partnership and a friendly alternative to an aggressive China. The gridlock between the two sides over American access and the Indian interests of vulnerable farmers has metastasized into a broader crisis: mutual tariffs, diplomatic snubs, and a collapse of trust at the highest levels. The American effort to open India to agricultural exports may have backfired, pushing India and China to mend ties, threatening the dominance of American agriculture worldwide, and harming the pocketbooks of American consumers.

While India and China have had their share of border disputes and geopolitical disagreements, Prime Minister Modi’s visit to the Shanghai Cooperation Organization (SCO) demonstrates that India is willing to find new allies in the wake of perceived American bullying. This rapprochement seriously complicates the U.S’s strategy to counter China in the Indo-Pacific, threatening US-India partnerships like the Quad, once considered a bulwark against Chinese hostility in the region.

This rebuilt friendship threatens the livelihood of American farmers. After the United States imposed steep tariffs on China, China opted to retaliate with significant tariffs against American agricultural goods. These tariffs have already inflicted two billion dollars in losses on American farmers, which they have been unable to offset in world markets. China has made up for the loss by expanding its agricultural imports from other South Asian producers, including India. In 2023, China became the top buyer of Indian rice, and the trade relationship has only deepened since then. In a joint statement issued after the SCO meeting, the member countries promised to expand agricultural trade and reduce trade barriers, suggesting that India and China both view agricultural decoupling from the United States as a long-term goal. If the United States loses its agricultural trade relationship with China, thousands of farms would go bankrupt, and the economy of farm belt states would be permanently damaged. 

The impasse created by agricultural disputes between the U.S. and India has bled across sectors. Escalating tariffs and trade tensions have already impacted Americans, and these impacts are felt nowhere more acutely than in healthcare. The U.S. is India’s largest export market for pharmaceuticals, worth $10.5 billion in 2025. India manufactures 47% of low-cost generic drugs, and these generics are crucial in keeping prices low. With Indian manufacturers increasingly opting for friendlier markets, Americans face higher drug prices and insurance premiums if the trade instability does not resolve. American companies have already slowed the billions of dollars they invested in developing a manufacturing base in India, weakening both countries’ economies.

This swirling trade dispute threatens to harm both American and Indian strategic priorities and both American farmers and consumers.