The joint statement issued by India and the United States regarding the ongoing trade agreement clearly shows that the Modi government has fully safeguarded India’s agricultural sector and farmers’ interests. At the same time, with the objective of boosting exports of Indian agricultural products to the United States to new heights, India has successfully persuaded the US to apply zero-duty tariffs on several Indian agricultural exports. This development has completely dispelled the concerns raised by the opposition and certain other sections regarding the agreement. For this achievement, Commerce Minister Piyush Goyal and the Modi government deserve commendation.
The joint statement also announced that India will not open its market to American dairy products, and that the US will maintain zero-duty rates on certain products manufactured in India’s small and medium sectors and exported to the US.
In the agricultural sector, India has allowed imports only of those animal feed products that are genuinely required in the Indian market and can benefit Indian farmers. Regarding the target of $500 billion in bilateral trade, both countries aim to reach this level over the next five years. In the commercial agreement, India has successfully secured tariff concessions from the US that will help ensure continuous growth in Indian exports. Particularly in agriculture, this agreement could give fresh momentum to India’s export growth.
The biggest benefit for Indian farmers will be that domestic prices of their agricultural produce will not fall, while Indian consumers will also benefit through increased availability of certain products that are produced in limited quantities within India.
Although it will take some more time to finalize the detailed list of products, the fears that were being spread across India’s agricultural sector regarding the agreement have been proven baseless. In reality, even without a formal agreement, agricultural trade between the two countries has been steadily increasing in recent years, with US exports growing at a relatively faster pace. However, India still exports more agricultural products to the US than it imports.
The root of the controversy lay in former US President Donald Trump’s statement announcing that the US would export goods worth $500 billion to India, including agricultural products. The only truth in that statement was that after the announcement of a competitive tariff rate of 18 percent, bilateral trade would increase. On the other hand, Commerce Minister Piyush Goyal had expressed confidence that India would finalize the agreement only after fully safeguarding the interests of its agriculture and dairy sectors.
India’s agricultural imports from the US primarily include dry fruits such as almonds, pistachios, and walnuts, along with ethanol, cotton, and soybean oil. Meanwhile, India’s exports to the US include seafood, spices, rice, processed fruits and vegetables, baked foods, essential oils, sugar, vegetable oils, and prepared foods.
In 2025, India exported agricultural goods worth $5.9141 billion to the US, while imports stood at only $2.8537 billion, clearly indicating that the agricultural trade balance is in India’s favor.
The US wanted India to open its market further for ethanol imports for use in petrol blending, whereas India currently allows ethanol imports only for industrial purposes. Ethanol in the US is largely produced from corn, where the US has one of the highest per-hectare yields in the world. In India, ethanol is produced from agricultural raw materials such as sugarcane, rice husk, and corn.
Therefore, it was essential for India to protect this sector—and that is exactly what the agreement has ensured. Ethanol is just one example that highlights how India has protected its agricultural interests. It is important to note that India’s per-hectare crop productivity remains significantly lower than that of the US, making protective measures vital to ensure profitable domestic prices for Indian farmers.
The same concern applies to the dairy sector. In the US, cattle are often fed non-vegetarian feed, allowing cheaper milk production, whereas in India, the cost of milk production per liter is higher. Despite this, India has become the world’s largest milk producer. Hence, the agreement restricts the entry of American dairy products into India.
In essence, a trade agreement must ensure that the domestic prices of Indian farm produce never fall below those of American imports. In this context, Agriculture Minister Shivraj Singh Chouhan has also stated that Indian farmers’ interests will remain fully protected and will not be compromised under any circumstances.
However, imports of American cotton into India have increased in recent times. From August to December, the Indian government allowed zero-duty imports of US cotton, but from January 1, 2026, the duty was raised to 11 percent. A similar situation occurred with soybean oil, although under a different tariff structure.
Statements by American politicians had caused concern in India, as they claimed that the agreement would open India’s vast market to US agricultural products and ultimately help offset America’s trade deficit. However, the joint statement has conclusively dismissed all such apprehensions, proving that India’s agricultural and farmer interests remain firmly protected.
