How India-US Interim Trade Deal Will Benefit Agriculture Sector: Boost to Exports, Farmers’ Income and Agri-Tech Investment

New Delhi: India’s agricultural sector is set to emerge as a key beneficiary of the recently announced India-US interim trade agreement framework. The pact, which reduces reciprocal tariffs on Indian exports to the US and strengthens market access, can be seen as a strategic win for exporters - including those in the farm and agricultural sectors.

Under the framework, no market access concessions have been extended for spices, vegetables or fruits, keeping India’s core agricultural sectors insulated from import competition. Vegetables remain fully excluded from the agreement, including dried vegetables, beans and pulses, as well as roots and tubers such as potatoes and sweet potatoes, with no tariff concessions granted.

Similarly, fruits and fruit products have been kept out of the scope of the interim deal. The framework allows no entry for fresh fruits, while dried fruits, preserved fruits and nuts, and dried peels of citrus fruits or melons also remain excluded, ensuring that domestic growers are not exposed to imports in these sensitive segments.

At the same time, India has agreed to eliminate or reduce tariffs on a narrow list of US agricultural products that are considered non-sensitive. These include dried distillers grains(DDGS), red sorghum, select tree nuts, limited categories of fresh and processed fruits, and wine and spirits. Officials said these products either have minimal domestic production or are used largely as inputs in feed and food processing, limiting their impact on Indian farmers.

The interim framework also secures preferential access for Indian goods to the US market, with Washington agreeing to reduce tariffs on a range of Indian exports to an average of 18 per cent, alongside easing non-tariff barriers. This is expected to benefit Indian exporters, including agri-processing and value-added food sectors, without compromising primary agriculture.

The Union Minister informed that the agreement safeguards India's farmers and rural livelihoods by fully protecting sensitive agricultural and dairy products such as maize, wheat, rice, soy, poultry, milk, cheese, fuel ethanol, tobacco, certain vegetables, and meat.

"At the same time, 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. This agreement will help India and the US remain focused on working together to further deepen economic cooperation, reflecting shared commitment to sustainable growth for our people and businesses," said the 'X' post.

Goyal also pointed to the broader economic upside, noting that opening access to a USD 30 trillion U.S. market would benefit labour-intensive sectors, including agri-exports, and generate employment for youth and women in rural and semi-urban India.

At the same time, broad tariff reductions and tariff elimination on some industrial inputs and processed goods aim to unlock export potential across sectors including agriculture, textiles, gems, and pharmaceuticals.

This strategic word play allows the government to project a narrative of opening markets without opening vulnerabilities  particularly in sensitive sectors where India’s small and marginal farmers comprise a large portion of the workforce.

The framework reflects India’s broader trade strategy of balancing export growth with firm red lines around agriculture and dairy, sectors that employ a large share of the population and are politically and economically sensitive.

The interim agreement is seen as a foundation for a broader  trade pact, with further negotiations expected to continue, while agriculture and dairy remain protected under India’s stated negotiating position. Talks on detailed agreements and sector-specific safeguards are expected to continue in the coming months.

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