India has negotiated the interim trade agreement with the United States with a “clear mindset” on protecting sectors that are “very” sensitive for the country, Commerce Secretary Rajesh Agrawal said, adding that all key segments have been safeguarded under the pact.

He said both sides are working to convert the joint statement into a legal text, which is expected to be finalised and signed before the end of March.

“India has always negotiated all agreements with a clear mindset, anything that is very sensitive to India, anything where we feel our farmers, fishermen, dairy, they are going to be impacted, we have been very clear to our partner countries that India can not open up or provide access,” Agrawal told reporters here.

“If you look at all the agreements that we have done in the last year, five trade agreements that we did -- all the sensitive sectors have been protected. In the US, all the key sensitive sectors have been protected. Wherever there is a little sensitivity, we have used tariff rate quota mechanisms to ensure that any market access is limited in nature and it doesn't impact our farmers,” he added.

Under the interim trade pact announced earlier this month, India has fully protected sensitive agricultural and dairy products, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables and meat, with no duty concessions granted to the US on these items.

These products are considered sensitive as they are directly linked to the livelihoods of small and marginal farmers. In other Free Trade Agreements (FTAs), India has also refrained from extending import duty concessions on sensitive agricultural and dairy products. It has recently finalised FTAs with the European Union, the UK and Australia.

Agriculture and allied activities, including animal husbandry, form the backbone of India’s rural economy, employing more than 500 million people. Unlike developed economies where agriculture is highly mechanised and corporatised, farming in India remains a livelihood issue. The sector is currently protected by moderate to high tariffs and regulatory measures to shield domestic farmers from unfair competition.

US agricultural exports to India stood at USD 1.6 billion in 2024, with key items including almonds (in shell, USD 868 million), pistachios (USD 121 million), apples (USD 21 million) and ethanol (ethyl alcohol, USD 266 million).

Agrawal is in the country for the Biofach 2026 show, where over 100 Indian exhibitors from around 20 states are showcasing organic products. The European Union is a major market for these goods.

“The teams are working on it, and by March, we are hopeful to make it (interim trade pact with the US) official,” Agrawal said.

On labour-intensive sectors, he said the agreement would give Indian exporters an edge over competitor nations facing higher tariffs in the US market. Under the pact, reciprocal tariffs on India will be reduced to 18 per cent, compared with 35 per cent for China and 20 per cent for Vietnam.

“Since the US has been a strong market for the labour-intensive sector, with this interim agreement, there will be an advantage to our labour-intensive sectors. They will be able to grow unhindered.

“So my sense is that Indian exporters will be able to compete with their competitors, revive and rejuvenate the supply chains that they might have missed out during the Christmas time and see that Indian exports not only grow but do well as they were doing last year, and also grow in the coming years,” the secretary said.

Labour-intensive sectors such as textiles, apparel, marine products, and gems and jewellery were earlier hit by steep 50 per cent tariffs imposed by the US. The Trump administration has since removed the 25 per cent punitive tariffs and will reduce reciprocal tariffs to 18 per cent from 25 per cent.

Agrawal said stakeholders and exporters were satisfied with the outcome and had given a “thumbs up” to the agreement.

“What we have been able to achieve in the interim agreement is good for India and our exports. I don't see any major red line in this,” he said.