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Dear Donald Trump, hear out Indian farmers

For India, agricultural protection is similar to US anxiety on immigration.

Once, I took a group of American students to learn more about the rural parts of India. We spent a couple of weeks in a village, where the students were constantly trailed by giggling children, several of them shouting out questions. So, we decided to hold an assembly at a school where the children could learn about America, with me translating. One of the questions was about the difference between villages in India and those in the US.

One of my students responded, “Well, both Indian and American farmers work hard, but American farmers have larger farms with tractors and other machinery, so they produce more. In the old days, American farmers lived like Indian farmers with outhouses. But now everyone has flush toilets, trucks, and refrigerators.” The kids were astounded. They asked, “So everyone wants to live in a village?” The answer, “Not really, many move out and find jobs in cities.” This drew a puzzled response: “My brother studied in a city but did not find a job, so he is helping on our farm. Things must be different in America.”

Therein lies the difference between the challenges Prime Minister Narendra Modi and US President Donald Trump face. Opening up Indian markets to American agricultural and dairy products has emerged as a key sticking point in the tariff negotiations. The democratic pressures on the two governments differ vastly. Farm subsidies, mechanisation, and large farm sizes enable the US to produce affordable wheat, soybeans, and other crops. Indian farmers struggle in a low-productivity world where they barely manage to subsist. Whereas agricultural workers form less than two per cent of American workers, in India, they are 45 per cent. While agriculture is an increasingly smaller portion of Indian GDP — only about 17 per cent by World Bank estimates — the proportion of workers in agriculture has barely declined. Thus, anything that affects agricultural incomes affects a far greater proportion of the population in India than in the US.

India needs to enhance its agricultural productivity and compete effectively in the global market. It needs to generate more jobs in the manufacturing and service industries to reduce crowding in agriculture. However, these are complex challenges without instant solutions, and they are not addressable within the kind of tariff deadlines that seem to be offered. With 65 per cent of the population living in rural areas, farm distress is a genuine concern to both the populace and politicians. It is not surprising that protecting Indian agriculture is the red line around which all Indian political parties have united, whether they belong to the ruling party or the Opposition.

When it comes to dairy, the challenge is even thornier. India produces about a fourth of the dairy products in the world. Almost all of it is consumed locally with little import or export. Unlike the corporatisation of dairy production in the US, India’s milk production primarily comes from households that own two or three milk-producing cows or water buffaloes. Women are largely responsible for animal care and milking. Families use the milk for home consumption, but they also sell it when there is excess production. Milk cooperatives such as Amul and Mother Dairy dominate the market. They purchase, pool, and process milk via village-level cooperatives from rural women. According to some estimates, the dairy sector comprises nearly 80 million dairy farmers.

It is the salience of agriculture and dairy farming to the lives of hundreds of millions of Indians that makes it difficult to imagine a scenario in which global trade pressures and corporate profits trump the livelihoods of rural families. Gujarat is the birthplace of cooperative dairying, where the profits of Amul are distributed to more than three million members. In 2019, when there was a possibility of including the dairy sector in a regional trade agreement, the Prime Minister’s mailbox was flooded by thousands of handwritten postcards from women in Gujarat, arguably leading to India’s withdrawal from the regional partnership.

Indian discourse on agricultural protection is similar to the American discourse on immigration. Republicans and Democrats are, by and large, united that unchecked immigration is not sustainable. Whatever the economic benefits of lower labour costs with a large pool of immigrants, the social costs, particularly for workers living close to poverty, are unacceptable. It is puzzling why the same empathy can’t be shown to Indian farmers, and particularly women dairy farmers, who have few other avenues of employment.

Hopefully, someday, manufacturing and services in India will boom, reducing the stress on agriculture. However, until that day arrives, it should not be surprising to Trump and his advisors to fathom why it would be as difficult for Modi to abandon agricultural tariffs as it would be for America to abandon farm subsidies — they began in 1933 and have ranged from $9 to $55 billion in recent years.

The writer is distinguished university professor emerita, University of Maryland College Park and professor, National Council of Applied Economic Research, New Delhi. Views are personal.

Women in Policymaking: Social Spending and Outcomes

This paper assesses the impact of women’s participation in national governments (as parliamentarians and ministers) on social spending and outcomes in emerging market and developing economies (EMDEs). We find that the representation of women in politics has increased over time, with substantial variation across regions and countries. Latin America and the Caribbean lead among EMDE regions, while Middle East and Central Asia and Emerging and Developing Asia have lower female representation. The higher shares of women in parliaments and cabinet positions go hand-in-hand with increased government health spending, both as a share of GDP and total spending. The results on education outlays are broadly similar. Greater representation of women in policymaking is also associated with positive effects on social outcomes, such as a reduction in infant and under-five mortality rates, greater access to basic water services, and higher learning-adjusted years of schooling. The case studies presented in the paper highlight the importance of identifying national priorities on health and education and increasing the share of female political leaders (including through quotas where gender biases are entrenched).

NCAER News: September 2025

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The sovereignty premium countries pay for financial autonomy

The hidden costs countries now accept for strategic resilience.


A new principle is reshaping global finance: the sovereignty premium – the economic cost countries willingly pay for financial autonomy. This premium functions as geopolitical insurance, a calculated payment to build structural resilience against exclusion while securing self-determination. For an increasing number of states, economic efficiency now matters less than strategic control over their financial structure.

This shift is not a future prediction. It is happening now and is measurable across sectors from semiconductors to pharmaceuticals. Recent United Nations discussions on mobilising $2.8tn annually for climate transition underscore the search for new financing sources. The Bridgetown Initiative 3.0 demands we tap every possible avenue. Yet while these discussions continue at multilateral forums, a different arithmetic is already taking shape: countries systematically accepting higher costs for financial autonomy.

The sovereignty premium is quantifiable. New multilateral institutions established since 2015 manage over $77bn, despite borrowing costs running 30-50 basis points higher than those of traditional development banks. Alternative development finance carries 3-4 percentage point premiums. Central banks have increased gold reserves by over 1,000 tonnes annually for three consecutive years, accepting zero yield.

Countries are even discovering and monetising dormant public wealth – from urban land banks to sovereign carbon rights – accepting operational complexity over simpler external borrowing. These patterns extend beyond finance: pharmaceutical reshoring costs 50-200% more than traditional supply chains, while semiconductor initiatives represent $500bn in commitments globally, creating jobs at double the market rate.

The club goods logic of parallel finance

J M Buchanan’s 1965 theory of clubs explains the mechanism. Club goods work when members value exclusive benefits more than they dislike congestion costs. In development finance, countries accept inefficiency to gain autonomy over lending conditions, project selection and governance structures.

Data localisation requirements reduce gross domestic product by up to 1.7% in implementing nations. Regional headquarters mandates impose 25% cost disadvantages on international firms. Production-linked incentive schemes prioritise domestic capacity despite import alternatives costing half as much. Cities and nations are discovering vast unrecorded public wealth – railway station air rights, military land conversions, ecosystem services worth billions – choosing complex monetisation over conditional external finance. These are considerable economic sacrifices and operational complexities that are accepted in exchange for autonomy.

From 1944 to 2008, the universal financial architecture minimised transaction costs through standardisation. The efficiency gains were clear, but so were the power asymmetries – voting structures still show 400-fold differences between the most major and most minor shareholders. Since 2022, we have seen replacement, not reform. Alternative payment architectures now process tens of trillions of dollars annually, with 50% year-over-year growth. Digital currency pilots are now active in 137 nations, up from 35 in 2020. Regional bond markets exceed $200bn in combined issuance.

Parallel assessment frameworks duplicate effort. Financial fragmentation could reduce global GDP by 7%, or roughly $7.4tn, according to recent estimates. For developing countries, this means $200bn in lost annual growth. Yet, countries continue to build redundant systems, suggesting that the insurance value exceeds these costs.

Climate urgency changes the calculus

Infrastructure needs were estimated at $15tn through 2040, before considering climate impacts. Add $2.8tn annually for mitigation and adaptation in developing countries. Regional economies require an additional $130-170bn in yearly investment to maintain their current trajectories.

This is where fragmentation costs most. Rather than pooling resources, we’re building parallel systems. Traditional multilateral development banks manage approximately $300bn annually across all sectors – representing less than 11% of the total climate finance needs. Net flows to developing countries turned negative in recent quarters. Countries in need of infrastructure are watching capital flow into financial plumbing instead.

But the climate emergency changes the economics. When traditional channels deliver less than 4% of requirements, paying sovereignty premiums becomes rational. If parallel systems mobilise even 10% additional finance – $280bn annually – the efficiency losses become acceptable.

New institutions reveal these priorities: 70% of announced projects target energy infrastructure, strategic reserves, and supply chains rather than traditional poverty reduction. Countries participating in multiple development institutions have increased infrastructure spending by an average of 2.3% of GDP since 2020. Causation remains disputed, but the trend is unmistakable.

Technology could reduce premiums. Central bank digital currency experiments promise 80% reductions in cross-border transaction costs. Common technical standards, such as ISO 20022, maintain autonomy while cutting operational expenses, but technical compatibility differs from governance alignment. The fragmentation continues.

Why institutional reform cannot solve this

Capital adequacy reviews could unlock $200bn. Special Drawing Rights reallocation aims for $100bn to support vulnerable economies. Yet, voting weights barely shift despite the transformation of global economic power.

Path dependency explains the persistence. Network effects lock in existing arrangements. Those positioned to change systems benefit from maintaining them. Without credible commitment mechanisms, reform promises lack force. Countries build alternatives rather than wait.

Game theory predicts this outcome. The sovereignty premium becomes the price of certainty. Energy independence initiatives accept 40% higher costs than optimal sourcing. Strategic reserves at three times buffer norms represent insurance, not waste. National wealth funds sacrifice 2-5 percentage points in returns for strategic mandates.

Three assumptions have collapsed. First, efficiency doesn’t always prevail – political economy can sustain inefficient equilibria when the benefits of sovereignty exceed its costs. Second, digitalisation lowered the minimum efficient scale for financial systems, enabling parallel architectures. Third, we see stable fragmentation, not convergence.

The poorest countries face the worst outcomes. Unable to afford sovereignty premiums, they confront shrinking options: accept onerous conditions, lose access or exhaust resources across multiple systems. Those least responsible for climate change face the highest adaptation costs with the fewest financing options.

The sovereignty premium is adaptation, not progress. Our development finance architecture fragments precisely when climate change demands coordination. Yet fragmentation might unlock new resources. Multiple inefficient systems could deliver more total finance than one efficient system that fails to meet needs.

The question isn’t whether fragmentation is optimal – it isn’t. The question is whether it expands total financing. Recent UN discussions acknowledge this reality. In a climate emergency, redundancy might be precisely what resilience requires. The sovereignty premium is that insurance price. Whether it’s worth paying depends on how much autonomy matters versus efficiency – and whether choice exists at all.

Udaibir Das is a Visiting Professor at the National Council of Applied Economic Research, Senior Non-Resident Adviser at the Bank of England, Senior Adviser of the International Forum for Sovereign Wealth Funds, and Distinguished Fellow at the Observer Research Foundation America.

Care economy: The missing pillar in India’s ageing journey

A structured care-giving industry can not only meet a vital social need but also generate large-scale employment, spur health-tech innovation, and create new public-private models of welfare.

India is often described as a young country, but the truth is that it is also ageing faster. As per a report by NITI Aayog, the elderly in India currently comprises a little over 10 per cent of the population, translating to about 104 million, and is projected to reach 19.5 per cent of the total population by 2050. This demographic shift brings with it profound challenges for healthcare, social support, and above all, care-giving.

For generations, India’s joint family system ensured that elders were cared for at home and surrounded by family members. But as urbanisation and migration break down this traditional structure, millions of elderly Indians now face the prospect of living their final years without adequate support. Unlike developed countries that have built robust systems of long-term care, India remains woefully unprepared for the sheer scale of its ageing population.

The silent emergency

The need for professional care-giving is not just a social observation; it’s a statistical reality. The National Sample Survey Office (NSSO) data from the health rounds for 2004 and 2017-18 reveals a compelling link between age and physical immobility, a key indicator of the need for assistance. While only 4.93 per cent of those aged 60-70 were immobile in2017-18, the figure soared to more than 56.57 per cent for those above 90years. Even among the 81-90 age group, more than a quarter faced mobility challenges

Women are disproportionately affected. Around 8.85 per cent of elderly women are physically immobile, compared to just over 6.17 per cent of men. With women living longer on average, they form the largest demo-graphic in need of long-term support. These statistics signal a silent but urgent crisis. While the overall percentage of immobility has marginally declined over the two time periods between 2004 and 2017-18, the absolute number of elderly Indians is growing rapidly. In other words, mil-lions more people will need assistance with daily living, medical sup-port, and companionship in the years ahead.

Breaking away from tradition

Traditionally, care-giving was an unquestioned ‘sacred duty’ of the family — it is a family-centric care model. Parents cared for their children, who in turn were expected to look after their parents in old age. But this cultural equation no longer holds true and is under immense pressure in modern India. Migration has scattered families across cities and even continents leading to a unique evolution of the ‘nuclear family structure’. Dual-income households with time-pressed and work-stressed of-ten failed to provide the kind of constant support to immobile elders. The result is a gaping “care gap,” where elders find themselves without reliable assistance for their basic needs.

In this vacuum, the care-giving market is slowly emerging. Currently, itis a patchwork of domestic workers, a few home healthcare agencies, and some assisted living facilities concentrated mostly in metropolitan and urban areas. But demand far outstrips supply, and affordability re-mains a major hurdle.

Nascent industry

India’s elder care industry remains in its infancy, but its potential is enormous. It can expand into diverse services from basic home assistance to specialised care for chronic conditions like dementia and Parkinson’s. The integration of technology, such as tele-health and wearable health monitors, can further enhance the quality and reach of these services. The need for professionalised services could give rise to an entire scalable “silver economy.”

Most elderly Indians prefer to age in their own homes. This makes home-based services like nursing, physiotherapy, personal attendants, and remote health monitoring a critical growth area. Technology such as tele-health consultations, fall-detection sensors, and medication re-minders can extend the reach and quality of such care.

Although culturally resisted, senior living communities are gaining traction in urban India. Independent apartments with emergency sup-port, assisted living facilities with 24/7 caregivers, and memory care units for dementia patients are slowly emerging as viable options for wealthier families. Tiered-pricing could make these more accessible in semi-urban and smaller cities.

Training and employment

India faces a shortage of trained caregivers. Formal certification pro-grammes could both raise quality standards and create millions of jobs, especially for women in rural and semi-urban areas. Care-giving for the elderly could become a respected, professional career path rather than informal labour.

End-of-life care and dementia care are woefully neglected in India. Culturally, conversations around death and cognitive decline still re-mains a taboo. Yet the need is undeniable. Establishing hospices, memory care centres, and home-based palliative services will be essential for dignified ageing.

Many families still view professional care-giving as abandonment, preferring to somehow “manage” at home even when overwhelmed. Overcoming this stigma will require public awareness campaigns that frame professional care as an extension, not a replacement, of family love. Cost is another major barrier. Without insurance or government subsidies, professional care remains unaffordable for most. Expanding schemes like Ayushman Bharat to include elder care, or creating a long-term care insurance model, could transform affordability. Finally, there is the lack of a regulatory framework. Without standards for training, wages, and service delivery, quality varies dramatically. Regulation could ensure dignity and safety for both caregivers and care receivers.

India’s ageing is not a looming crisis — it is already here. As data sug-gest, more than half of our nonagenarians are immobile, and millions of seniors in their 70s and 80s struggle daily with limited mobility and in-adequate support. But if approached with vision, this challenge can be turned into an opportunity. A structured care-giving industry can not only meet a vital social need but also generate large-scale employment, spur health-tech innovation, and create new public-private models of welfare. Perhaps one day we may see tech-firms entering this space to offer a range of care services for the elderly.

A call for urgency

The measure of a society is how it treats its most vulnerable. India today stands at a crossroads. One path is denial and delay, which will turn our demographic shift into a humanitarian crisis. The other is urgency and foresight, which can transform elder care into a new frontier of social progress. Caring for our elderly is not charity. It is an obligation —moral, social, and economic.

Baruah is Fellow at National Council of Applied Economic Research(NCAER), New Delhi, and Wankhar is a retired Government of India officer. Views are personal.

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