Under the interim trade agreement with the US, India has fully protected sensitive agricultural and dairy products like maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables and meat as no duty concessions will be granted to America on these goods.
India and the US on Saturday announced that they have reached a framework for an interim trade agreement. Under this, the US will reduce tariffs on Indian goods to 18 per cent from the earlier 50 per cent.
“The agreement reflects India’s commitment to safeguarding farmers’ interests and sustaining rural livelihoods by completely protecting sensitive agricultural and dairy products, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables and meat,” Commerce and Industry Minister Piyush Goyal said in a social media post.
These goods are sensitive as they involve the livelihood of small and marginal farmers of the country. The interests of farmers remain paramount in all trade negotiations, he said, adding that the Modi government remains fully committed to protecting farmers and securing rural livelihoods.
“No concessions have been extended to sensitive agricultural sector produce in grains, fruits, vegetables, spices, oilseeds, dairy, poultry, and meat amongst many others while securing preferential access for Indian goods through the India-US Interim Agreement framework," Goyal said.
In other free trade agreements (FTAs) also, India has not extended any import duty concessions on sensitive farm and dairy products. India has recently finalised FTAs with the European Union, the UK and Australia.
Under such trade pacts, while import duties are eliminated in certain areas on the day the agreement comes into force, in others they are phased out over time. In some sectors, duties are reduced, while in others, quota-based concessions are provided.
India has always kept out sensitive sectors like dairy, rice, wheat, meat, poultry, cereals, GM foods, soymeal and maize out of the ambit of its trade agreements. Agriculture and allied activities like animal husbandry form the backbone of India's rural economy, providing employment to over 700 million people. Unlike in developed economies, where agriculture is highly mechanised and corporatised, in India, it is a livelihood issue.
India's agriculture sector is currently protected by moderate to high tariffs or import duties and regulations to shield domestic farmers from unfair competition. The US agri exports to India were $1.6 billion in 2024. Key exports include almonds (in shell, $868 million); pistachios ($121 million), apples ($21 million), ethanol (ethyl alcohol, $266 million).
Given that over 50 per cent of India’s population relies on agriculture for its livelihood, India treats the entire sector as sensitive. Import or customs duties are particularly important for staple crops, dairy and key farm products that sustain rural livelihoods.
In FY 2025, India's total agricultural exports increased to over $51 billion from $45.7 billion in 2023-24 with a portion of this going to the US ($5 billion). India's total exports in FY25 were $437 billion. India aims to reach $100 billion in combined exports of agriculture, marine products and food and beverages in the next four years.
As per a joint statement issued by the two nations, India will eliminate or reduce tariffs on a wide range of US food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.
Also read: ‘Closely engaged’ with US on IP, electronics: Vaishnaw
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