Why India Rejects US Corn Imports: Key Trade, Policy, and Market Impacts

India and the United States have recently restarted formal trade talks after a period of strain. Both sides have called the discussions “positive” and “forward-looking,” signalling intent to resolve outstanding issues. At the heart of the agricultural debate is corn. US Commerce Secretary Howard Lutnick has voiced frustration that India, despite being an active corn importer, sources little to none from the US.

On the surface, it might look counterintuitive. If India needs corn, why not buy cheaper US supplies? Wouldn’t that ease domestic costs and strengthen bilateral trade? The answer lies in a mix of policy priorities, biofuel strategy, and farmer protection—factors that shape not just India’s agri imports but also the global flow of agricultural trade.

Key Reasons Why India Is Against US Corn Imports

Here are the key reasons why India is refraining from importing corn from the US:

• Genetically Modified Organism Restrictions

India’s regulatory framework under the Environment Protection Act, 1986, and the Food Safety and Standards Act, 2006, prohibits the import of genetically modified (GMO) corn for both human and animal consumption. As of 2025, over 90% of US corn is genetically modified, primarily engineered for pest resistance and herbicide tolerance.

India’s Genetic Engineering Appraisal Committee (GEAC) has not approved GMO corn for import, making US shipments non-compliant. In 2024–25, India imported 0.97 million tonnes (mt) of corn, but only 1,100 tonnes came from the US, reflecting this regulatory barrier. Myanmar and Ukraine, which supply non-GMO corn, accounted for 0.53 mt and 0.39 mt, respectively.

• Tariff Structure and Import Quotas

India imposes a dual-tier tariff on corn imports. Up to 0.5 million tonnes annually can be imported at a concessional duty of 15%. Any quantity beyond this threshold attracts a steep 50% tariff. This structure discourages bulk imports from high-cost suppliers, such as the United States. In contrast, India imported 1.3 lakh tonnes from Myanmar and 4 lakh tonnes from Ukraine between January and August 2025, all duty-free under bilateral arrangements.

The United States, which levies 50% tariffs on Indian goods, faces reciprocal barriers. This tariff asymmetry has led to negligible US corn imports despite India’s rising demand.

• Self-Sufficiency

The Food and Agriculture Organization of the United Nations (FAO),

India ranks as the world’s 5th largest corn producer, according to Food and Agriculture Organization of the United Nations (FAO), December 2023 data. In 2024-25, India’s annual corn output was approximately 42.8 million tonnes.

Major producing states include Uttar Pradesh, Andhra Pradesh, Maharashtra, Telangana, Tamil Nadu, Bihar, Madhya Pradesh, and Karnataka. Nearly 50 to 60% of this output is used for animal feed, 15 to 20% for ethanol blending, and 10 to 15% for food consumption.

• Political Sensitivities

States like Bihar, Madhya Pradesh, and Karnataka are politically sensitive maize producers. Bihar alone contributed 3.8 million tonnes in 2024, making it India’s third-largest maize-growing state. With assembly elections scheduled in late 2025, any move to allow US corn imports could trigger farmer protests and electoral backlash. The central government has therefore maintained a cautious stance, avoiding policy shifts that could destabilise rural constituencies.

• US-China Trade Collapse

The United States exported $5.21 billion worth of corn to China in 2022, but this fell to just $331 million in 2024 due to escalating trade tensions. Between January and July 2025, China’s imports from the US dropped to a mere $2.4 million. With China retreating, the US is aggressively seeking new markets, including India. However, India views this push as opportunistic and misaligned with its long-term agri-trade strategy.

• Long-Term Consumption Projections

According to the US Department of Agriculture, India’s corn consumption is projected to rise from 34.7 million tonnes in 2022–23 to 98 million tonnes by 2040 and 200.2 million tonnes by 2050 under rapid income growth. Even under moderate growth, consumption could reach 93 million tonnes by 2050. Import requirements may touch 46 million tonnes by 2040 and 134 million tonnes by 2050. India aims to meet this demand through domestic scaling, including hybrid seed development and irrigation expansion.

• Protection of Smallholder Farmers

India’s corn sector is dominated by smallholder farmers, many cultivating less than two hectares. These farmers are vulnerable to price shocks from large-scale imports. Allowing unrestricted US corn imports could depress domestic prices, undermining rural livelihoods. In 2024, the average farm-gate price for maize in India was ₹2,250 per quintal, while the landed cost of US corn (after tariffs) exceeded ₹2,300 per quintal. The government’s import restrictions serve as a protective buffer for domestic producers, preserving income stability and rural employment.

• Ethanol Policy Drives Domestic Demand

India’s ethanol blending targets under the National Bio-Energy Policy have sharply increased maize demand. The 2025 target mandates 20% ethanol blending in petrol, requiring 1,700 crore litres of ethanol annually. Maize contributes 15–20% of this volume. In 2024-25, ethanol-linked maize demand rose to 12.7 million tonnes, up from 0.8 million tonnes in 2022-23. This surge has turned India from a net exporter to a net importer of maize. However, the government prioritises domestic sourcing to support farm incomes and reduce foreign exchange outflows.

Conclusion

India’s decision to stay away from US corn isn’t only about trade disputes. It’s shaped by local farm policies, the need to protect small growers, and the push for energy security through ethanol. For investors, the key point is that maize demand in India will keep rising, opening up opportunities in farm inputs, storage, transport, and related sectors. Global trade tensions may add noise, but the long-term story is India’s push for self-reliance—something traders and investors should track closely.

Read more:

US Revokes Chabahar Waiver: Impact on India’s Trade, Energy and Investor Confidence

Sources

FoodSafety Institute
USDA Economic Research Service, US Department of Agriculture
The Indian Express
News18
Government of India, Ministry of Commerce and Industry
Mint
Business Today
Vajiram & Ravi
Hindu Businessline
The Economic Times
Insights IAS
The Hindu
Hindustan Times
OpIndia
India Today
NDTV