No genetically modified items will enter India, and no concessions have been granted on several politically sensitive commodities including soya, ethanol, tobacco and certain vegetables.

India and the United States unveiled a framework for an interim trade agreement on February 6, committing India to eliminate or reduce tariffs on a wide range of American food and agricultural products. In exchange, the US will apply a reciprocal tariff rate of 18 per cent on many Indian exports, down sharply from the punitive levels imposed earlier under President Donald Trump’s tariff policy. While officials hail the deal as a step toward balanced trade and greater market access, analysts and farm groups warn that the agricultural openings could expose vulnerable Indian producers to subsidized US competition.

The joint statement issued by the White House and by the Government of India explicitly lists dried distillers’ grains (DDGS), red sorghum for animal feed, tree nuts (almonds, walnuts, pistachios), fresh and processed fruits (including apples and berries), soybean oil, wine and spirits, and “additional products” as areas where India will grant duty concessions or easier market access. Non-tariff barriers on US farm goods will also be addressed, with India agreeing to review US standards and certifications within six months.

India Commits to Tariff Cuts on Key US Farm Products

The concessions mark one of the most significant openings of India’s farm sector to the US outside a full free-trade agreement. Tree-nut imports, already worth $1.3 billion in 2025 and up 34 per cent year-on-year, are expected to surge further with lower duties. Fresh apples and berries could intensify pressure on growers in Himachal Pradesh, Jammu and Kashmir and the Northeast. Soybean oil – currently attracting 16.5 per cent duty and accounting for roughly 4.8 million tonnes of India’s edible-oil imports – will face preferential access from a heavily subsidized US industry.

DDGS, a corn-based ethanol by-product used in livestock and poultry feed, is perhaps the most contentious inclusion. The US exports nearly 12 million tonnes annually. Domestic soybean farmers, already struggling to realise minimum support prices because cheaper DDGS substitutes for soybean meal, fear further price depression. India grows soybeans on nearly 13 million hectares, mainly in Madhya Pradesh, Maharashtra and Rajasthan.

Sensitive Sectors Remain Protected, Say Officials

Commerce Minister Piyush Goyal has repeatedly assured that “core farmer interests have been safeguarded.” Staples such as wheat, rice, maize, sugar, dairy, poultry and meat are explicitly excluded. No genetically modified items will enter India, and no concessions have been granted on several politically sensitive commodities including soya, ethanol, tobacco and certain vegetables. Goyal emphasised that Indian agricultural exports will gain zero-duty access to the US in several categories, while sensitive domestic sectors remain ring-fenced.

Finance Minister Nirmala Sitharaman and other ministers have framed the agreement as a net positive for MSMEs, textiles, pharmaceuticals, gems and jewellery and handicrafts – sectors that will benefit from the US tariff rollback to 18 per cent (and removal of the additional 25 per cent levy linked to Russian oil purchases).

Potential Blow to Domestic Oilseed, Fruit and Cotton Growers

Independent analysts are far less sanguine. Ajay Srivastava of the Global Trade Research Initiative (GTRI) described the agricultural opening as “one-sided.” Analysts argue that India is permanently lowering most-favoured-nation tariffs on products that directly compete with domestic producers, while the US has merely rolled back unilaterally imposed reciprocal tariffs.

Cotton growers are another worried constituency. Domestic production has fallen from a peak of 39.8 million bales to around 30 million bales. Concessional imports of US cotton could further depress farm-gate prices. The timing is especially awkward: the Union Budget has been pushing diversification into high-value crops and oilseeds, precisely the areas now facing greater import competition.

The national mission on edible oils and oil palm aims for self-sufficiency, yet easier access for subsidised US soybean oil runs counter to that goal. Analysts say that India already imports over 60 per cent of its edible-oil requirement; cheaper US supplies could discourage domestic oilseed cultivation.

Trade-Off for Export Relief and Strategic Partnership

The deal also includes India’s commitment to purchase $500 billion worth of US energy products, aircraft, technology items and coking coal over the next five years, alongside deeper alignment on economic security and supply-chain resilience. Both sides describe the framework as a stepping stone to a comprehensive Bilateral Trade Agreement.

Bilateral farm trade currently shows India with a modest surplus ($6 billion exports vs $3 billion imports), but US imports from India in sensitive categories grew over 30 per cent in 2025 alone. Washington’s larger goal is to narrow the overall goods trade deficit, which stands at roughly $40 billion in India’s favour.

Farm organisations have already begun voicing strong opposition. Some groups have called for nationwide protests, arguing that Indian farmers are effectively underwriting tariff relief for manufacturing and service sectors.

As detailed tariff schedules, tariff-rate quotas and safeguard mechanisms are finalised in coming weeks, the real test will be whether the promised “calibrated” market access translates into genuine protection for rural livelihoods or merely delays an inevitable adjustment burden on Indian agriculture.

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