India-US deal protects core farm sectors; US fruits, nuts imports could rise: Experts

India-US deal protects core farm sectors; US fruits, nuts imports could rise: Experts

• India-US interim trade pact lowers tariffs on select US farm products
• Sensitive crops and dairy remain protected to safeguard Indian farmers
• US exports of tree nuts, cotton, and soybean oil to India may increase

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For the agriculture sector, the interim US–India trade pact adopts a calibrated approach, safeguarding Indian farmers while offering limited tariff concessions on select US farm products, industry players say.

However, experts cautioned that while lower tariffs could benefit consumers as the demand for imported food grows, domestic producers might find it hard to compete in categories like fruits and nuts, as the country imports nearly $4 billion worth of these items.

“This deal is not something we wished for. India had resisted an FTA with the US for a long time. So this is making the best out of the worst. On wine and spirits, India seems to have cautiously loosened its approach. To the EU, it gave a much larger quota of whisky than the UK. So one can expect a similar approach here,” Sangeeta Godbole, Former Trade Negotiator of India, said.

On fruits and nuts, Godbole noted that it may be difficult to compete with the Indian prices, although a growing appetite for exotic foods may create a market for the US goods.

“We imported about $4 billion of fruit and nuts in the last 2 years, with tariffs. So I suppose reduction in tariffs should benefit those consumers,” Godbole said.

India and the US on Saturday announced an Interim Agreement regarding reciprocal and mutually beneficial trade (Interim Agreement), which will include additional market access commitments and support more resilient supply chains between the two sides.

As per the new agreement, India will reduce or eliminate tariffs on a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum (animal feed), tree nuts, fresh and processed fruits, soybean oil, and wine and spirits.

“At the same time, the agreement reflects India’s commitment to safeguarding farmers’ interests and sustaining rural livelihoods by completely protecting sensitive agricultural and dairy products, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol(fuel), tobacco, certain vegetables, meat, etc,” Union Minister of Commerce and Industry, Piyush Goyal said.

The government added that the agreement will help India and the US remain focused on working together to further deepen economic cooperation, reflecting shared commitment to sustainable growth for our people and businesses.

Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat, noted that major crops, food grains, fruits, and dairy products remain protected, and the market has not been opened to genetically modified crops. “While India continues to export significantly more agricultural products to the US than it imports, US farm exports of tree nuts, cotton, and soybean oil to India could grow under the pact. Overall, the agreement supports a stable and balanced agri-trade relationship without putting pressure on Indian farmers,” Mishra said.