Renowned agricultural economist Ashok Gulati has strongly criticized the Modi government’s trade policies, calling its “redlines” inconsistent, irrational, and economically indefensible. Gulati, a Distinguished Professor at ICRIER and former Chairman of the Commission for Agricultural Costs and Prices, emphasized the urgent need for a pragmatic and coherent approach to international trade in a recent interview.
Inconsistent Redlines on GM Products
Gulati’s primary concern centers on India’s stance toward genetically modified (GM) crops. The government has repeatedly refused to import GM corn and soy from countries like the United States, citing ideological objections rather than scientific or economic reasons.
Gulati highlights the contradictions in this policy. GM cotton has been cultivated in India for over two decades. Additionally, GM cotton oil is widely used for cooking, and its seeds serve as feed for poultry and livestock. India also imports American soy-based cooking oil, which is largely GM. These facts make the refusal to import GM corn and soy appear hypocritical and inconsistent.
Dairy Imports: A Missed Opportunity
Another area of concern is India’s ban on India US trade American dairy products. Gulati argues that this is unnecessary because American dairy made from cows fed on vegetarian diets is available. By importing these products, India could engage in mutually beneficial trade without affecting domestic sensitivities.
He emphasizes that strategic flexibility is crucial. Rigid policies limit India’s ability to secure advantageous trade agreements with major partners like the United States.
Tariff Structure Criticized as Overprotective
Gulati also questions India’s tariff system for agricultural imports. While edible oil and cotton attract low or zero duties, corn, soybean, and skimmed milk powder face tariffs as high as 45-60%.
He argues that this approach is overprotective and counterproductive, as many segments of Indian agriculture are competitive enough to thrive in an open market. Overly high tariffs, he says, hinder India’s potential for exports and discourage efficiency in domestic production.
Economic Implications of Rigid Policies
Maintaining rigid trade redlines could have serious consequences. Gulati warns that inflexibility may jeopardize billions in exports, including key sectors like shrimp. He stresses that trade is a give-and-take relationship, and ideological rigidity undermines India’s economic interests.
He urges policymakers to adopt a rational and predictable framework, allowing India to negotiate effectively and expand its influence in global trade.
Gulati’s Call for Reform
In conclusion, Ashok Gulati advocates for a fundamental rethink of India’s trade policies. Scrapping inconsistent and irrational redlines can help:
- Strengthen India’s negotiating position internationally
- Improve competitiveness in the domestic agricultural sector
- Encourage sustainable and economically viable trade relationships
His insights highlight that protectionist and ideologically driven trade policies may hinder India’s growth potential and global credibility.
FAQ – Ashok Gulati on India’s Trade Policy
Q1: Who is Ashok Gulati?
A1: Ashok Gulati is a Distinguished Professor at ICRIER and former Chairman of the Commission for Agricultural Costs and Prices.
Q2: What trade policies is he criticizing?
A2: He criticizes India’s redlines on importing GM crops, American dairy, and inconsistent agricultural tariffs.
Q3: Why does he call the GM policy inconsistent?
A3: GM cotton has been widely cultivated in India, and soy-based products are imported, making the refusal to import GM corn and soy contradictory.
Q4: What are the economic risks of rigid trade policies?
A4: India risks losing export opportunities, especially in sectors like shrimp, and reduces its competitiveness in global markets.
Q5: What reforms does Gulati suggest?
A5: He calls for pragmatic, rational, and consistent trade policies that balance domestic sensitivities with international opportunities.
