India may import US corn for ethanol production as trade talks advance
India is negotiating a bilateral trade agreement with the US, exploring purchases of American corn for ethanol and increased energy imports. Talks also address lifting punitive tariffs on Indian imports of Russian crude. Discussions aim for a fall conclusion, balancing US trade interests, Indian farmer protection, and energy security concerns.
India is exploring the purchase of US corn for ethanol production, along with increased energy imports, as part of fresh proposals in ongoing trade negotiations with the United States. The discussions aim to conclude a bilateral trade agreement (BTA) by this fall.
New Delhi has also pressed Washington to lift the 25 per cent additional tariffs imposed as a penalty for Indian imports of Russian crude oil, which the US claims is funding the war in Ukraine. A report by Economic Times cited an official saying, ‘Fresh offers have been made… there is discussion to buy corn for ethanol production.’
US pushes for soybean and corn imports
The US has been encouraging India to increase imports of American soybean and corn. India, however, has resisted, citing concerns over genetically modified (GM) crops entering the food chain. Officials have emphasised that protecting domestic farmers and preventing GM products from entering the market remain key priorities for the Indian side.
In August, India exported goods worth $6.86 billion to the US, while imports were valued at $3.6 billion, according to government data.
Timeline for negotiations to complete
According to reports, the talks are progressing on schedule, with both sides aiming to meet the fall deadline, although the date and venue for the next round of negotiations have not yet been finalised.
Discussions are expected to continue in phases, with officials indicating that both parties remain committed to the process and to achieving an early conclusion of the trade pact.
During his visit to the US earlier this week, Commerce Minister Piyush Goyal met United States Trade Representative Jamieson Greer and US ambassador-designate to India, Sergio Gor. This marked the first in-person engagement since the imposition of the 25 per cent punitive tariffs on August 27, which, combined with a previous reciprocal tariff, bring the total to 50 per cent. An Indian delegation led by Rajesh Agarwal also met with their counterparts as part of the same visit.
In addition to government-level talks, the delegation held meetings with US-based businesses and investors to promote trade and investment. The ministry noted that these discussions received a positive response, with business leaders expressing confidence in India’s growth story and a desire to expand their activities in the country.
Both sides discussed and exchanged views on the “possible contours” of a trade deal during Goyal’s visit, according to an official statement issued on Friday. Both sides will continue their engagements towards an “early conclusion” of a trade agreement.
“Both sides exchanged views on possible contours of the deal and it was decided to continue the engagements with a view to achieve early conclusion of a mutually beneficial trade agreement,” the commerce department said.
Russian oil a sticking point
The US administration has maintained that India’s purchase of Russian crude is a major pain point in the discussions. President Trump’s officials, including Commerce Secretary Howard Lutnick and trade adviser Peter Navarro have repeatedly and publicly assailed India for continuing to buy Russian crude. India has maintained that purchase of the discounted oil is necessary for its energy security, while pointing out that it was encouraged by the earlier US government to keep global crude prices stable.
On Thursday, a US official said both countries were negotiating a comprehensive resolution covering not only outstanding trade issues but also Washington’s concerns over New Delhi’s continued purchase of Russian oil.
“We want to address it comprehensively rather than piece by piece. There has to be some sort of agreement at the higher levels to President Donald Trump’s satisfaction that we have a way forward to ultimately reduce and eliminate India’s Russian oil purchases. The oil issue is the thorniest. When that’s resolved, the others won’t be too tough to negotiate,” said the official.
On Friday, however, India’s Petroleum Minister Hardeep Singh Puri claimed there were no international sanctions specifically banning crude oil purchases from Russia. “There are no sanctions on Russian oil. If you want to sanction Russia, then it has to be a proper sanction and apply to all. Then we will see what the consequences are,” he said, adding that ““If you remove the world’s second-largest producer, you will either have to cut consumption, stop eating, or face very serious consequences. Prices will shoot up.”
Meanwhile, India’s crude oil imports from Russia in September are expected to increase by around 200,000 barrels per day (bpd) from August levels, ship tracking data showed. India has imported 1.63 million barrels of crude oil from Russia until September 23, as against 1.71 mn bpd in August, according to data from Kpler, a global shipping data and analytics provider.
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Source : Business Standard
