India Protects Key Farming and Dairy Sectors in New US Trade Deal
India and the United States have officially reached a framework for a new interim trade agreement. As part of this deal, the US will significantly lower taxes (tariffs) on Indian goods, dropping them from 50% down to 18%.
Protecting the Livelihood of Indian Farmers
Under this agreement, India has ensured that sensitive agricultural and dairy products are fully protected. No tax concessions were given to the US for several key items, including:
- Staple Grains: Wheat, rice, and maize.
- Proteins: Poultry, meat, and soya.
- Dairy: Milk and cheese.
- Other Goods: Ethanol (fuel), tobacco, and specific vegetables.
Commerce and Industry Minister Piyush Goyal stated on social media that this agreement shows India’s commitment to protecting farmers and supporting rural communities. These products are considered “sensitive” because they directly affect the income and survival of small-scale farmers across the country.
A Consistent Trade Strategy
India’s decision to shield its farm sector is not new. In recent trade deals with the European Union, the UK, and Australia, India also refused to lower import duties on sensitive agricultural and dairy products.
Agriculture and animal husbandry are the backbone of India’s rural economy, providing jobs for over 700 million people. Unlike in many developed nations where farming is a large-scale corporate business, in India, it is a vital source of daily livelihood. Currently, the government uses import duties to protect domestic farmers from unfair competition.
Current Trade Between India and the US
In 2024, US agricultural exports to India totaled $1.6 billion. The most popular items included:
- Almonds: $868 million
- Pistachios: $121 million
- Apples: $21 million
- Ethanol: $266 million
Because more than half of India’s population depends on farming, the government treats the entire sector with great care. Keeping import taxes on staples and dairy is essential for maintaining rural stability.
Growth in Indian Exports
India’s agricultural exports are on the rise. In the 2025 fiscal year, exports grew to over $51 billion, up from $45.7 billion the previous year. About $5 billion of these goods were sent to the US.
Looking ahead, India aims to reach $100 billion in total exports for agriculture, seafood, and beverages within the next four years. Key export products include tea, coffee, rice, spices, fruits, and vegetables.
What the US Will Gain
While sensitive items remain protected, a joint statement from both nations confirmed that India will lower or remove taxes on several other US products. These include:
- Feed for animals (dried distillers’ grains and red sorghum).
- Tree nuts and soybean oil.
- Fresh and processed fruits.
- Wine and spirits.
This balanced approach allows for increased trade between the two nations while ensuring that India’s rural economy remains secure.
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