Agriculture, dairy shielded in India-US deal; trade pact in weeks

India-US Trade Pact Nears Completion with Key Protections

In a significant development for bilateral ties, India and the United States have reached the final stages of a comprehensive trade agreement. Union Commerce Minister Piyush Goyal announced that negotiations, spanning over a year, have ensured the full protection of India's sensitive sectors, particularly agriculture and dairy. These areas, vital to millions of Indian farmers, will remain shielded from foreign competition that could disrupt local markets. Goyal emphasized that the deal prioritizes a "farmers-first" approach, reflecting Prime Minister Narendra Modi's commitment to rural livelihoods. The pact comes after a phone call between Modi and US President Donald Trump, who hailed it as a win for American exports while respecting India's red lines.

Trump shared the news on social media, stating that tariffs on Indian goods entering the US would drop to 18 percent, while India would ease some barriers on American products. However, Goyal clarified that no compromises have been made on core interests, countering claims of a lopsided agreement. This framework promises zero-duty access for over $40 billion in Indian exports, focusing on labor-intensive industries. As details are ironed out, both nations prepare for a joint statement that could reshape their $500 billion trade relationship.

Safeguards for Farmers Amid Tariff Cuts and Export Boost

The agreement exempts critical items like dairy products, cereals, rice, wheat, maize, meat, poultry, soybeans, and ethanol from any tariff reductions or market openings. Moderately sensitive goods, such as certain nuts and oils, may see limited quotas or phased duties over three to ten years, but nothing that threatens domestic producers. This careful calibration positions India favorably compared to deals with countries like Vietnam or Bangladesh, where US duties hover around 19-20 percent. Indian exports in textiles, leather, marine products, chemicals, and processed foods stand to gain from day-one duty cuts to 18 percent, potentially creating jobs in export-oriented sectors.

On the US side, officials like Agriculture Secretary Brooke Rollins celebrated the opportunity to send more farm products to India's vast market, addressing a $1.3 billion trade deficit from 2024. Yet, American agricultural leaders express cautious optimism, awaiting specifics on dairy and biofuel access after years of stalled talks. For India, the deal also includes a five-year $500 billion purchase commitment for goods India already imports, ensuring balanced gains without flooding local markets. Goyal described it as a "mother of all deals" that treats all sectors fairly.

"This is a farmers-first deal for India, protecting agriculture, dairy, and other key sectors. We all know how PM Modi works for farmers and is worried about them. This deal will make all Indians proud," Union Commerce Minister Piyush Goyal told reporters.

Political Reactions and Path Forward

The announcement has ignited political debate in India. Opposition leaders, including Congress's Rahul Gandhi, have accused the government of compromising national interests and selling out farmers. Goyal hit back in Parliament and public statements, condemning the "negative thinking" of critics and urging an apology for misleading the public. He thanked Trump for honoring his friendship with Modi and portrayed the pact as a milestone for India's growth in textiles, gems, machinery, and more. As technical details wrap up, expectations run high for opportunities that could propel exports and economic progress.

US agricultural groups, meanwhile, push for clarity on market access, noting Europe's recent India deal excluded dairy. Industry voices see potential in biofuels like ethanol, given India's push for flex-fuel standards. With the agreement better than those of competing nations, it underscores India's negotiating strength. The focus remains on implementation to unlock benefits for workers and rural economies on both sides.

In wrapping up, this India-US trade deal balances protection for agriculture and dairy with tariff relief for key exports, setting the stage for mutual prosperity. Expected in weeks, it promises jobs, fair trade, and stronger ties amid global shifts, while silencing doubts through firm safeguards.