India will scrap agricultural reform laws that sparked a year of huge protests by farmers, Prime Minister Narendra Modi said Friday in a stunning U-turn that sparked celebrations but also criticism from economists.
Thousands of farmers have been camped out on the borders of the capital New Delhi since November last year, handing Modi one of the biggest challenges since his Hindu nationalist government came to power in 2014.
The rallies became a lightning rod for opposition to Modi's administration in a country where two-thirds of the 1.3 billion population rely on agriculture for their livelihood.
In a contrite address to the nation coinciding with a major Sikh festival -- the religion of many farmers -- Modi said the laws would be repealed in parliament's winter session, which begins later this month.
"I appeal to all the farmers who are part of the protest... to now return to your home, to your loved ones, to your farms, and family. Let's make a fresh start and move forward," the 71-year-old said.
The surprise announcement sparked muted celebrations on Friday with farmers chanting, waving flags and beeping tractor horns at two protest sites outside Delhi.
"Until they give it to us in writing, we won't leave from here. We don't trust the government," farmer Gurmeet Singh, 50, told AFP.
"Our farmers have died fighting for this. Until it's passed in the parliament, we won't leave."
- 'Black day' -
The reforms passed in September 2020 aimed to deregulate farm produce markets where state bodies have for decades set guaranteed minimum prices for crops.
Modi reiterated on Friday that the changes would have boosted rural incomes and reformed a hugely inefficient agricultural sector where a vast amount of produce rots before it can be sold.
Thousands of Indian farmers commit suicide every year because of poverty, debt and ever more erratic weather patterns caused by climate change.
"This is a black day in the history of India's economic reforms. This is Modi's worst decision ever," economist Gautam Chikermane from the Observer Research Foundation think tank told AFP.
"Now there will be no agriculture sector reforms for the next 25 years... These three farm sector reforms would have done to India's agriculture what the 1991 reforms did to manufacturing and services."
- Big business -
But protesters said the changes -- which were suspended pending negotiations with the farmers -- would have left farmers at the mercy of big business.
The farmers first tried to march on New Delhi last November, but violent clashes police prevented them from entering the capital.
They camped out at two sites outside the city, blocking major highways. In the subsequent months they dug in as their numbers swelled to tens of thousands.
The protests turned into colourful, semi-permanent camps with volunteers providing food, sanitation and even dentist surgeries and foot massage parlours.
- 'Hundreds dead' -
Unions say hundreds of farmers died during the protests, which continued even through a devastating spike in Covid-19 in April and May.
The rallies turned violent in January when a tractor rally transformed into a rampage that embarrassed the government on Indian Republic Day, leaving one farmer dead and hundreds of police injured.
Last month in Uttar Pradesh state, four farmers died when a convoy allegedly belonging to a government minister and his son slammed into protesters. Demonstrators then set fire to several cars and four other people were killed.
In recent months, the protest sites had thinned out, but a hard-core contingent remained and major demonstrations had been expected for the one-year anniversary of the start of the rallies later this month.
Modi's reversal came ahead of important elections for his Bharatiya Janata Party (BJP) in states such as Punjab and Uttar Pradesh, both home to huge numbers of farmers.
Hartosh Singh Bal, political editor of Caravan magazine, told AFP: "The farm laws were dead in the water and it was always a question of Modi's ego which stood in the way of government repealing them."
"This decision also reflects that BJP's reading of (the Uttar Pradesh) election is tighter... People who were voting for him will vote irrespective but it will ensure that some who may have voted against him over this may now vote for him."