Thousands of people from the big farming state of Punjab were camped out on the outskirts of Delhi for a fifth day demanding that they be allowed to stage protests in the city centre against the new laws that open up India’s tightly regulated farm produce market.

Farmers who could earlier sell grains and other products only at neighbouring government-regulated wholesale markets can now sell them across the country, including to big food processing companies and retailers such as WalMart.

But farm groups and opposition parties say the government will eventually abolish the wholesale markets, where growers were assured of a minimum support price for staples such as wheat and rice, leaving small farmers at the mercy of corporate agribusinesses.

Speaking at a public rally during a visit to his political constituency of Varanasi in northern India, Modi dismissed the fears as misplaced.

“The new agricultural laws have been brought in for benefit of the farmers. We will see and experience benefits of these new laws in the coming days,” he said. He blamed the opposition for spreading rumours about the future of farmers.

The farm sector contributes nearly 15 per cent of India’s US$2.9 trillion economy and employs around half its 1.3 billion people.

The government says the deregulation of the sector will attract investment and fix the supply chains that lose a quarter of India’s produce to wastage.

But Rahul Gandhi, the leader of the main opposition Congress party, said the new laws would benefit big business and accused Modi of crony capitalism.

“Our farmers are standing up against the black laws, they have reached Delhi leaving their farms and families behind. Do you want to stand with them or with Modi’s capitalist friends?” he said in a tweet.

— Sanjeev Miglani is Reuters’ bureau chief in New Delhi.

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India, the world’s largest milk-producing nation, has traditionally restricted dairy imports to protect the livelihoods of 80 million rural households involved in the industry.

But Prime Minister Narendra Modi is trying to pull all the stops for the U.S. president’s Feb. 24-25 visit, aimed at rebuilding bonds between the world’s largest democracies. In 2019, Trump suspended India’s special trade designation that dated back to the 1970s, after Modi put price caps on medical devices, such as cardiac stents and knee implants, and introduced new data localization requirements and e-commerce restrictions.

Trump’s trip to India has raised hopes that he would restore some of the country’s U.S. trade preferences, in exchange for tariff reductions and other concessions.

The United States is India’s second-largest trade partner after China, and bilateral goods and services trade climbed to a record $142.6 billion in 2018. The United States had a $23.2 billion goods trade deficit in 2019 with India, its ninth-largest trading partner in goods.

India has offered to allow imports of U.S. chicken legs, turkey and produce such as blueberries and cherries, Indian government sources said, and has offered to cut tariffs on chicken legs from 100 per cent to 25 per cent. U.S. negotiators want that tariff cut to 10 per cent.

The Modi government is also offering to open up India’s dairy market, but with quotas and a five per cent tariff on some products, the sources said. Dairy imports will need a certificate they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants.

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