Trade, as we all know, is good for those who trade. If two parties freely choose to exchange stuff, we can be certain of this: that they expect to gain from that, else they would not do so. Free trade is what we call a win-win situation or a positive-sum game.
Trade involves two parties and only two parties. If a third party intervenes uninvited, then it is not free trade. In that case, instead of that win-win game, it could be win-lose or even lose-lose game. The world would be a lot better if it had universal unrestricted trade.
I have a particular interest in trade. That’s because I am an economist, and economics is the study of humans as they go about that peculiar business of exchanging stuff. Trading is as unique to humans as is reading and writing: no other animal does it.
In his 1776 book “An Inquiry into the Nature and Causes of the Wealth of Nations” Adam Smith wrote about specialization and the division of labor. It is the division of labor that gives rise to “general opulence.” One of the causes of wealth is division of labor.
Smith maintained that the division of labor did not come about as a consequence of wisdom arising from deep reflections about the nature of the world. It was just that exchanging stuff is human nature, “the propensity to truck, barter, and exchange one thing for another.”
The full quote from Book 1, Chapter 2 is worth reading. [See Note 1.] Written 250 years ago, it is no wonder that its style differs from ours. The sentences are long with many dependent clauses. The clarity of thinking that is expressed in the writing is a marvel to behold. It’s not meant for speed reading.
I could go on all day about the beauty of trade but I shall desist since I have places to go, things to do and people to meet. But the title of this post is “international trade and food” for a reason. Reader Prabhu Desai wrote a comment to the post “Trade Wars and Freedom.” It’s about international trade and food. Here’s the comment, for the record.
BEGIN QUOTE.
One great feature of free market capitalism is not just that it makes everyone better off but it is also morally correct.
It is highly immoral to think it is okay for some to prevent fellow Indians from buying French wines, American Milk, Scottish whiskeys and Japanese Beef. India is a deeply malnourished country. Food prices are very high. Indians spend a very high amount of their monthly income on groceries and things like meat and eggs are often seen as luxury.
For a country that has world’s largest population, if anything food should be free of any taxes or import duties. It is pretty ridiculous that for a poor and large nation some people think it is important to tax the hell out of imported food. Why not let the rancher in Texas feed the kids in Bihar ? Especially when the Rancher and Kids are both willing ?
People claim “National Security” and “Food Security”. India spends an astronomical sum on subsidizing agriculture which also destroys our soil and water resources. All this money could have gone into developing better weapons or better border infra making the nation more secure. We could have 5 more aircraft carriers if the money wasted on MSP and Ladli Laxmi was put into defense. (I am not saying we should, but this is purely a counter to national security argument).
Having more food in the country makes us more food secure not less. Having land in Texas being cultivated solely to feed Indians or Australian farmers toiling in sun to put food on our tables in India makes us much better prepared for a war with say China. Also, if we import food from USA/Australia/EU/Japan and if their voters are dependent on this export who do you think these countries will support in case of a war ?
With a deeply integrated markets India has more leverage against the world, making us much stronger.
At some point we have to confront the fact that India’s farm sector has been a laggard in every aspect. Our farmers work too hard, produce too little and of extremely poor quality food. Only a small percentage of our farm produce meets any reasonable quality standards. We do not have robust supply chains nor we can trust the quality of food we eat.
To give context nearly 100% of restaurants in India including restaurants that are serving high end customers serve fake paneer. Nearly all “ghee” used in street food is not ghee. Our meat processing plants are one of the filthiest in the world. Our fish is adulterated with formalin.
With external investment and know how, Indian farmers have an opportunity to get better. In fact we can export high end food items to the world only if we fix a lot of internal problems, better farmers around the world and companies can teach us how.
We have learned how to make cars from Suzuki, two wheelers from Honda, software from Google etc. etc. We can also be a world leader in food and dairy with similar approach.
Sadly Indians and current American leadership is intellectually backward to fully understand benefits of free trade.
END QUOTE
It’s all karma, neh!
Atanu Dey : Life is a Random Draw 
PD’s comment is not based on facts. It is not like India doesn’t import food. In fact, India’s agricultural imports grew 800% in the past 15 years.
If he is trying to say that India doesn’t import enough from the US, that again collides with facts:
“Trade in farm produce between the two countries is actually booming and poised to touch a new record this year. During January-June 2025, India’s imports of agricultural products from the US were, at $1,693.2 million, a whopping 49.1% more than the $1,135.8 million for the same six months of the last calendar year”.
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On a slightly unrelated note, Post Pahalgam massacre, do you think India should have reacted in any other way than it reacted (either militarily and diplomatically)?
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