What Did India Concede in Agriculture Under the India-US Trade Agreement?

After a week of rapid developments, the interim draft of the India-US trade agreement was finally released on the morning of February 7. The deal follows discussions held nearly a year ago between Prime Minister Narendra Modi and the US President Donald Trump. While the government has repeatedly maintained that India’s agricultural sector would remain unaffected, the draft reveals that this assurance was only partially true.

The agreement explicitly states that India will open its market to a range of US agricultural products by offering customs duty concessions and easing non-tariff barriers. In return, the United States has agreed to lower the reciprocal tariff imposed on Indian goods to 18%.

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The interim agreement includes a detailed list of agricultural commodities, first published by the US White House after midnight and later officially released by India. These products include dried distillery grain solubles (DDGS), soybean oil, tree nuts such as almonds, walnuts and pistachios, fresh fruits including apples and berries, processed fruits, cotton, red sorghum for animal feed, and other items. Imports of these products will be facilitated through reduced customs duties, zero-duty access for select items, and tariff rate quotas (TRQs). The agreement also covers wines, spirits and non-alcoholic beverages.

The government has clarified, and the draft confirms, that key staples such as wheat, rice and maize, along with sugar, dairy and poultry products, are excluded. India’s production of wheat, rice and sugar comfortably exceeds domestic demand, and the country is the world’s largest exporter of non-basmati rice at competitive prices. With wheat stocks improving, the government has already begun easing restrictions, allowing exports of 500,000 tonnes of flour and related products and recently lifting stock limits. Safeguarding the dairy and poultry sectors remains a strategic priority.

The real concern lies with other agricultural products. The Union Budget has simultaneously pushed for diversification toward high-value agriculture and plantation crops, many of which feature in the India-US trade agreement. India currently exports agricultural goods worth around $6 billion to the US, while imports from the US stand at about $3 billion, giving India a surplus of roughly $3 billion in farm trade.

However, imports from the US surged by over 30% in 2025 alone. Tree nut imports, particularly almonds and pistachios, rose 34%, touching $1.3 billion by November 2025. Duty concessions under the agreement are likely to accelerate this trend. Similarly, reduced tariffs and facilitated access for apples and other fresh fruits will directly affect domestic apple growers.

One of the most significant inclusions is DDGS, a protein-rich by-product of ethanol production from corn and other cereals, widely used in animal and poultry feed. The US exports nearly 12 million tonnes of DDGS annually, underlining the scale of potential imports. While the dairy and poultry sectors may benefit from cheaper feed, soybean farmers face direct competition, as DDGS substitutes soybean meal.

This has already had consequences. Over the past two years, soybean farmers have struggled to realise the Minimum Support Price (MSP), largely due to falling soybean meal prices triggered by DDGS imports. Soybeans contain only about 18% oil, with the remainder processed into meal. India cultivates soybeans across nearly 13 million hectares, primarily in Madhya Pradesh, Maharashtra and Rajasthan. Farmers in these regions stand to be among the biggest losers under the agreement.

Soybean oil is another sensitive item. India imports over 60% of its edible oil requirements, with soybean oil accounting for 4.8 million tonnes in the last oil year (November 2024 to October 2025). At present, soybean oil attracts a 16.5% customs duty, and imports largely come from Argentina, Brazil and Russia. Preferential access for subsidised US soybean oil could further depress domestic oilseed prices.

This comes at a time when India is pursuing self-sufficiency through the National Mission on Edible Oils and Oil Palm. Encouraging imports runs counter to this objective. A similar contradiction exists in cotton. Domestic cotton production has fallen from a peak of 39.8 million bales to around 30 million bales. Allowing concessional imports from the US would further weaken farm-gate prices and hurt Indian cotton growers.

The final list of agricultural products may expand once detailed tariff schedules and TRQ limits are released. But the broader strategic context is already clear. The US aims to export goods worth $100 billion annually to India. Bilateral trade currently stands at around $130 billion, with India enjoying a surplus of nearly $40 billion. Washington’s objective is to narrow, and eventually eliminate, this imbalance, potentially pushing total trade to $200 billion.

In an era of geopolitical uncertainty, over-reliance on a single trading partner carries risks. India already sends more than 20% of its exports to the US. China, by contrast, has gradually reduced its dependence on the American market. That diversification explains why Beijing was eventually able to force compromises when the US imposed reciprocal tariffs.