Slow erosion of farm sovereignty: The hidden cost of India’s free trade agreements

By Prof. Hemantkumar Shah* 

India’s ongoing pursuit of free trade agreements is being celebrated by the Union government as a marker of economic maturity and global ambition. Yet for millions of small and marginal farmers, these deals are fast becoming instruments of economic insecurity and creeping dispossession. This warning was voiced sharply at the Kisan Swaraj Sammelan held near Palanpur, where farmers and activists from a dozen states gathered to reflect on policies reshaping Indian agriculture. The core anxiety expressed was simple: free trade agreements are being negotiated quietly and aggressively, and their burden is falling disproportionately on India’s poorest cultivators.

In 2019 the government trumpeted its decision to walk away from the Regional Comprehensive Economic Partnership, saying it would not jeopardise Indian farmers’ livelihoods. Many believed this signaled a new commitment to safeguarding domestic agriculture. But what has unfolded instead is a backdoor embrace of multiple bilateral and bloc-based pacts—from Japan and South Korea to the UAE, Mauritius, Australia, the UK and New Zealand—as well as groups such as ASEAN and EFTA. These agreements open Indian markets to cheap imports, particularly agricultural goods. When duties are dropped to zero on as much as ninety per cent of incoming products, as seen in last July’s pact with the United Kingdom, it becomes naïve to call this path self-reliance.

Under such agreements, India often relinquishes control over the volume of imports allowed, meaning that foreign commodities can flood Indian markets at will. This problem is compounded by deep global inequalities. Wealthy countries continue to give massive subsidies to their own farmers—averaging the equivalent of forty-six lakh rupees per farmer annually in the United States. Indian cultivators receive barely twenty thousand rupees a year, and this already meagre support is routinely dismissed as “freebies” by the Prime Minister. It is insulting to expect farmers with less land, fewer resources and far smaller safety nets to compete with highly capitalised agribusinesses shielded by lavish state support.

The comparison is absurd on every metric. In the United States, a typical farm spans over 440 acres. Ninety-two per cent of Indian farmers till less than five acres. To call this a competition is like pairing wrestler Dara Singh against an ordinary person and declaring the contest fair simply because both are in the same ring. Yet the rhetoric from policy circles insists that market competition will magically uplift all players. The reality is predictable: small Indian farmers lose before the match even begins.

What is even more worrying is the erosion of India’s autonomy in shaping its agricultural system. The framers of the Constitution declared India a sovereign nation, able to decide its economic priorities free from external pressure. But successive trade agreements suggest that sovereignty is now negotiable. Under pressure from rich nations, the government has avoided challenging their subsidies while cutting support to its own farming communities. Domestic farm policy is being moulded not by the needs of the rural majority but by the demands of global capital and large multinational corporations that already dominate the seed, fertilizer and agrochemical markets.

This contradiction extends to the government’s talk of organic and sustainable farming. While political leaders endorse natural agriculture in speeches, budget allocations are microscopic—less than a fraction of a percent of what is needed. Meanwhile, corporate farming inputs continue to flood the countryside with official blessing. The direction of policy is unmistakable: agriculture is being steered toward corporate dependency and farmer vulnerability.

India stands at a crossroads. It can protect its food producers—the people who feed the nation and sustain the countryside—or it can sacrifice them at the altar of trade liberalisation, hoping that trickle-down economics will somehow fill empty stomachs and stalled futures. Farmers gathered in Palanpur issued a caution grounded in lived experience: free trade agreements, as currently structured, are pushing India’s agriculture toward dependency, foreign control and economic ruin. Unless the government recalibrates its priorities, the promise of Atmanirbhar Bharat will ring hollow in the very fields where it should mean the most.

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*Senior Gujarat-based economst