New Delhi—Commerce and Industry Minister Piyush Goyal announced that the newly finalized India-US trade deal includes full protections for Indian farmers and the dairy sector, addressing widespread concerns raised by opposition leaders. Speaking in Parliament, Goyal emphasized that agriculture and dairy products remain deliberately excluded from tariff reductions, safeguarding India's sensitive farming communities while the country reduces industrial tariffs and halts Russian oil purchases.
Key Facts
• US tariffs on Indian goods cut to 18 percent from 50 percent, with India reducing industrial tariffs to zero from 13.5 percent as of February 3, 2026
• Agriculture and dairy sectors kept outside trade deal scope, protecting politically sensitive farming constituencies across India's 1.4 billion population
• Agreement reached after nine months of negotiations, with US Trade Representative Jameson Greer confirming some limited access to Indian markets for nuts, fruits, vegetables, wine, and spirits
After months of intense negotiations and public controversy, India's government finally secured a framework protecting domestic farming interests while opening industrial markets to American goods. Piyush Goyal defended the agreement against opposition leader Rahul Gandhi's criticism, stating that Prime Minister Modi had consistently prioritized farmer welfare throughout discussions.
The trade deal represents a significant shift in bilateral relations, with the US reducing its controversial 50 percent tariff imposed last August over India's Russian oil purchases. In exchange, India committed to halting crude oil imports from Russia and diversifying energy sources through American and Venezuelan suppliers.
Indian officials have consistently maintained that dairy and agriculture remain a "red line" that cannot be compromised despite US pressure for greater market access. US Trade Representative Greer acknowledged India would keep protections on "key areas" of its farm sector, particularly products like rice, beef, soybeans, sugar, and dairy products.
The agreement opens new opportunities for Indian textile exporters, gems manufacturers, machinery producers, and aircraft component suppliers seeking access to American markets. Farmers and dairy producers can breathe easier knowing sensitive commodities will not face sudden import competition that threatened their livelihoods.
Goyal praised President Trump for respecting Prime Minister Modi's friendship and delivering what he called
The minister emphasized that combined benefits would accelerate India's economic growth while ensuring no compromise on domestic food security.
US agricultural groups, including the International Dairy Foods Association, cautiously welcomed the agreement while noting continued interest in future market access discussions. The deal marks a historic resolution of the tariff tensions that had strained India-US economic relations since August 2025.
Piyush Goyal stated, defending the deal against critics who questioned farmer protections.
India and the United States will complete technical documentation this week or shortly thereafter, with a joint statement releasing final deal details. Business experts expect the agreement to significantly reshape global supply chains away from China, bringing high-end technology manufacturing to India while maintaining farming sector stability.
Do You Know?
India's sensitivity toward agricultural trade agreements stems from past regional deals like RCEP, where domestic farming groups feared unmanaged imports would devastate rural economies. This trade deal's explicit farming protections reflect lessons learned, ensuring nearly 900 million Indian farmers won't face sudden market disruption from cheaper American agricultural products.
Key Terms
• Tariffs: Taxes imposed on imported goods, with India's 50 percent tariff reduced to 18 percent on American products
• Reciprocal Tariffs: Equal trade barriers both countries impose on each other, which Trump administration replaced with the reduced 18 percent rate
• Russian Oil Diversification: India's commitment to reduce Russian crude imports and increase purchases from US and Venezuelan sources
• Sensitive Sectors: Politically important industries like farming and dairy that governments protect through trade restrictions to prevent economic harm to citizens
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