India-US trade deal: Agri, dairy interests 'protected', says Piyush Goyal

India has protected its sensitive agriculture and dairy sectors in the just-concluded trade deal with the US, said Union Commerce and Industry Minister Piyush Goyal on Tuesday. He said both sides are working towards soon issuing a joint statement that would set out the details of the agreement.

 

“This is a deal that will make every Indian proud, that will protect the interests of every Indian, and provide huge opportunities for all the people of India,” Goyal told reporters in New Delhi. He further noted that the agreement will “protect the sensitive sectors, the interests of our agriculture and our dairy sectors in full respect”.

 

Later, speaking to CNBC, United States Trade Representative Jamieson Greer said India, like every country in the world, including the US, has some protection around certain key areas. “They will continue to control that, we will continue to work on access,” he added. Greer said the process of making the deal official is under way.

 

Although US President Donald Trump said on Monday that India would reduce tariffs to “zero”, it’s learnt that New Delhi will substantially reduce tariffs on industrial and agricultural goods while continuing to protect sensitive sectors. India will, for instance, continue to withhold tariff concessions on products such as dairy, poultry, cereals, genetically modified food, soya meal, corn and maize.

 

Tariffs on some agricultural products that are not traditionally considered sensitive will be brought down to zero, while in the case of relatively sensitive items, duties will be reduced in a graded manner and quotas will be imposed.

 

The approach is in line with what New Delhi has offered to countries with which it has recently signed free-trade agreements. Similarly, in other sensitive areas such as automobiles and alcohol, India will follow a phased reduction approach.

 

“India’s average industrial goods tariff is 13.5 per cent. That is going to be zero for 98-99 per cent of products. There is a vast array of agricultural goods that will go to zero, for a variety of things such as tree nuts, wines, spirits, fruits and vegetables etc. This is a big win,” Greer said.

 

Goyal said the trade agreement would open up major opportunities for India’s labour-intensive sectors, including textiles, plastics, apparel, home décor, leather and footwear, gems and jewellery, organic chemicals, rubber goods, machinery and aircraft components, as duties are set to be cut sharply to 18 per cent from 50 per cent. These sectors together account for more than a third of India’s exports to the US.

 

The agreement comes more than five months after Washington imposed tariffs of up to 50 per cent on several Indian exports, including a 25 per cent punitive duty linked to India’s purchases of Russian oil. In the recently announced Budget for the 2026–27 financial year, the Indian government announced a series of Customs duty cuts and tax incentives for global cloud firms, measures that are expected to benefit American firms.

 

“We will maintain an 18 per cent tariff against India because we have this giant trade deficit with them, but they have also agreed to reduce their tariffs for us on a variety of agricultural products, manufactured goods, chemicals, medical devices etc. It’s an exciting opportunity for both countries,” said Greer.

 

Goyal said both sides were working on a “joint statement” outlining the details of the first phase of the agreement. “We will be shortly issuing a joint statement by both countries, along with the details, which we will be shortly inking between the United States of America and India. And as soon as the final understanding of the deal is inked and the joint statement is finalised, technical processes are completed, full details will be shared,” he told reporters.

 

This will be followed by a legally binding text, with reduced tariffs expected to come into effect once the joint statement is finalised.

 

Greer said that on non-trade barriers there was an understanding around a process for India to accept US standards.

 

India intends to buy goods worth $500 billion from the US over the next five years, including oil and gas, aircraft and parts, precious metals and diamonds, and technology products such as high-end chips and server equipment. The purchases are expected to include $20 billion worth of technology products used in setting up data centres.

 

The US is India’s largest export destination. In the 2024-25 financial year, India exported goods worth $86.5 billion to the US, while importing goods worth $45.6 billion.

 

The steep 50 per cent tariff on 55 per cent of India’s outbound shipments to the US had made Indian exports uncompetitive. The reduction in duties is expected to bring India closer to parity with regional competitors such as Vietnam, Indonesia, Malaysia, Thailand, Cambodia and Bangladesh, which are also key rivals in labour-intensive sectors.

 

The timing of the deal is critical for several of these industries, as contracts had begun to come under pressure in the absence of relief from high tariffs.

 

Products such as steel, aluminium, copper, automobiles and auto parts will continue to attract additional tariffs of 25-50 per cent under Section 232 of US domestic law. Exporters said India was not at a significant disadvantage, as the additional tariffs under Section 232 are not country-specific. 

What US Trade Representative Jamieson Greer said:

• India’s industrial goods tariffs on 98-99% items will go to zero from 13.5%
• Tariffs to be eased to zero on tree nuts, wines, spirits, and certain fruits &  vegetables
• India has some protection around certain key areas
• We’ve understanding on reducing India’s technical non-tariff barriers
• Monitoring India’s winding down of Russia oil purchase