Raghuram Rajan Urges Caution in India-US Trade Talks, Flags Risks to Agriculture Sector

By A Staff Reporter

New Delhi: Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday emphasized the need for India to adopt a cautious and strategic approach while negotiating trade agreements with developed nations, particularly the United States. Speaking at an event in Delhi, Rajan underscored the vulnerabilities of India’s agriculture sector in the face of highly subsidised imports from abroad.

Rajan noted that trade negotiations become especially complex in sectors like agriculture, where most countries support their domestic producers through subsidies. “Where it is much more difficult is in areas such as agriculture, where every country subsidises its producers, and our producers may be relatively smaller, may have somewhat lower subsidies,” he said.

He warned that opening up the domestic market to a largely unregulated flow of agricultural imports could have serious consequences for India’s small and marginal farmers. “The kind of harm that unconstrained flow of agricultural products into the country may create problems for them,” Rajan cautioned.

He also commented on the broader economic outlook, suggesting that India’s GDP growth has stabilized in the 6–7 percent range, though global trade uncertainties could cause slight fluctuations. “A fraction of percentage point may be affected by the global trade uncertainties,” he added.