How can India protect farmers and MSMEs while pursuing deep trade agreements with developed economies?

In 2019, India stayed out of RCEP because the deal did not address the concerns of its stakeholders [1]. Farmers and MSMEs were the most vulnerable of them. India is now negotiating deep pacts with the EU and the U.S. that cover tariffs, standards and non-tariff barriers. To gain market access without hurting these groups, India needs safeguards written into the treaty text and support at home.

1. Safeguards written into the agreement

• Exclusion lists: the India–EU FTA keeps dairy, cereals, poultry and soymeal out [4]. In the U.S. framework, major crops, foodgrains, fruits and dairy are shielded [3].
• Limited concessions: the duty cuts on DDGS, red sorghum and soybean oil [2] should apply only to fixed tariff-rate quotas. These should be reviewed each year against domestic maize and soybean prices.
• Rebalancing clause: the India–U.S. statement lets either side change its commitments if the other changes the agreed tariffs [2]. Keeping this clause in the final text stops India making permanent concessions for temporary gains.
• Rules of origin so that the benefits stay with the two partners [2]. Bilateral safeguards against sudden surges of imports.
• Regulatory space: commitments on non-tariff barriers [2] must not weaken India's food-safety or GM rules.

2. Helping farmers and MSMEs compete

• MSMEs: the Export Promotion Mission (₹25,060 crore, FY26–31) provides trade finance through Niryat Protsahan and compliance and branding support through Niryat Disha [5].
• Farmers: help FPOs use the new duty-free access for rice and spices [3]. Build testing labs that meet SPS standards, so that EU or U.S. norms do not become hidden barriers.
• Adjustment support: a fund to help sectors hurt by imports retrain workers and diversify.

3. A transparent, consultative process

• Publish the tariff schedules. Consult farmer unions, MSME associations and parliamentary committees before signing.
• Phase out tariffs on sensitive lines over long periods.

Negotiate (exclusions + quotas + rebalancing clause)
        → Prepare (EPM, FPOs, SPS labs)
        → Monitor (annual review, safeguard triggers)

Fig: Three-step approach to protecting vulnerable sectors in trade deals

Market access and protecting livelihoods can go together if India writes safeguards into the deal and builds competitiveness at home. Careful exclusion lists, quota-based opening and transparent consultation will let India gain from deep FTAs without repeating the risks it saw in RCEP. This also serves SDG 2 (Zero Hunger) and SDG 8 (Decent Work) and India's goal of self-reliance.