The government has said no duty concessions will be offered to the US on a range of sensitive agricultural and dairy products, citing the livelihoods of small and marginal farmers.
Under the framework announced on Saturday, the US will lower tariffs on Indian goods to 18 per cent from the earlier 50 per cent. In return, India has agreed to eliminate or reduce duties on selected American food and agricultural products.
However, staples and core farm sectors remain outside the scope of concessions.
“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 products are considered sensitive because they directly affect the income of small and marginal farmers, who form the bulk of India’s agricultural workforce.
Agriculture in India remains a livelihood issue rather than a commercial activity driven by large-scale mechanisation.
“The interests of farmers remain paramount in all trade negotiations,” Goyal 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,” he said.
India’s position is consistent with its approach in other trade negotiations. In recent Free Trade Agreements with the European Union, the UK and Australia, New Delhi has not offered duty concessions on sensitive agricultural and dairy products.
Trade agreements typically involve a mix of immediate tariff eliminations, phased reductions over time, partial duty cuts or quota-based concessions.
India, however, has kept sectors such as dairy, rice, wheat, meat, poultry, cereals, genetically modified foods, soymeal and maize outside the ambit of these pacts.
Agriculture and allied activities, including animal husbandry, employ over 700 million people in India.
Unlike developed economies, where farming is largely mechanised and corporatised, Indian agriculture is dominated by small holdings and family-run operations.
To protect domestic producers from external price pressures, India maintains moderate to high import duties and regulatory measures on farm products.
Customs duties play a key role in safeguarding staple crops, dairy and other essential items that support rural incomes.
The US exported agricultural goods worth USD 1.6 billion to India in 2024. Major items included almonds in shell worth USD 868 million, pistachios worth USD 121 million, apples worth USD 21 million and ethanol (ethyl alcohol) worth USD 266 million.
Given that more than half of India’s population depends on agriculture for livelihood, the sector is treated as sensitive across the board. Any reduction in import duties on staple items could have direct implications for farm incomes and price stability.
At the same time, India is pushing to expand its own agricultural exports. In FY 2025, agricultural exports rose to over USD 51 billion from USD 45.7 billion in 2023–24.
Exports to the US accounted for around USD 5 billion. India’s total exports in FY25 stood at USD 437 billion.
The government has set a target of reaching USD 100 billion in combined exports of agriculture, marine products, and food and beverages over the next four years.
Key export items include tea, coffee, rice, cereals, spices, cashew, oil meals, oil seeds, fruits and vegetables.
As per a joint statement issued by India and the US, New Delhi will eliminate or reduce tariffs on several American food and agricultural products.
These include dried distillers' grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, along with additional products.