NEW DELHI: India and the US have reached a trade agreement to reduce American tariffs on Indian goods from 50% to 18%. In return, India will halt purchases of Russian oil and lower certain trade barriers.
Both sides have shared broad outlines of the deal, but detailed terms remain under negotiation. Early indications suggest India will provide the US limited access to its agricultural market.
India is unlikely to lower tariffs on key US farm products such as corn, soybeans, and soymeal. Officials said this protects millions of small Indian farmers who rely on domestic agriculture for their livelihood. The US primarily produces genetically modified crops, which India restricts under its current laws.
While India imports soyoil from the US, Brazil, and Argentina, it has negligible soybean imports. Similarly, India has sufficient ethanol supplies from corn, rice, and sugarcane, making concessions to US ethanol requests unlikely.
The US has also pushed for greater access to India’s dairy market. However, Indian officials said smallholder farms, typically with only two to three cows, cannot compete with US industrial-scale dairy farms. As a result, the sector is likely to remain protected.
India could, however, allow the US more access to premium farm products such as almonds, walnuts, pistachios, apples, pears, and berries. These areas are less politically sensitive and would not harm the income of most Indian farmers. Wine, spirits, and certain fruits and vegetables may also see reduced trade barriers.
Farmers in India form a significant voting bloc, and protecting their interests remains a top priority. Experts say the trade deal with the US balances increased market access with domestic agricultural protections.
In other news read more about US and India Announce Major Trade Deal, Tariffs Cut to 18% After Talks
The agreement represents a step toward strengthening US-India trade relations while maintaining the sustainability of India’s agricultural sector and supporting millions of small farmers.
