India and the United States announced an ‘interim’ trade deal on Saturday morning — slashing tariffs on key imports and expanding access for American goods. New Delhi will also remove non-tariff barriers for several sectors and eliminate taxes levied on certain food and agricultural products.
“India will eliminate or reduce tariffs on all US industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products,” the joint statement confirmed.
US President Donald Trump had first announced the trade deal via Truth Social on Monday following a call with Prime Minister Narendra Modi. The POTUS said he had spoken to the Indian leader (one of his “greatest friends” and a “powerful, respected” official) about a wide range of issues. Trump had claimed at the time that Modi had also “agreed to stop buying Russian oil” and pledged to purchase American goods worth “over $500 billion”.
What will change after India-US trade deal?
India will cut duties on many “speciality” items that don’t directly compete with domestic staple farmers but remain in high demand. Imported tree nuts such as almonds and walnuts are likely to get cheaper once the deal comes into effect. US fruits have also gained easier market entry. India has also agreed to reduce tariffs on US soy oil — a major win for American crushers that will also help New Delhi manage its massive edible oil deficit.
Cereal, dairy, GM crops remain off limits
Several sectors — including cereal, dairy and GM crops — have been left completely out of the trade deal with America. Dairy found no mention, and cereals were mostly omitted (with one exception) from the 12-point agreement outlined on Saturday. Genetically modified crops were also a major sticking point during negotiations and left mostly out of the deal.
“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, meat, etc,” wrote Union Minister Piyush Goyal on X.
Dairy has been a historically sensitive sector for India — involving millions of small-scale farmers — and remains a non-negotiable red line for all its trade agreements. The world’s largest milk producer has laid heavy emphasis on strengthening local cooperatives over the years, rather than relying on imports and potentially crashing local prices. India also requires a certification that cattle have never been fed animal products — which other countries often face difficulty in meeting.