India Shields Farmers in US Trade Deal with 10-Year Tariff Phase-Out Plan

Under the India-US Bilateral Trade Agreement, the offer is categorized into immediate duty elimination, phased elimination (up to 10 years), tariff reduction, margin of preference and tariff rate quota mechanisms, the Central government said.

Highly sensitive agricultural sectors remain fully protected under a "carefully crafted exemption category".

These broadly include meat, poultry and dairy products; GM food products; soyameal; maize; cereals; millets such as jawar, bajra, ragi, kodo and amaranth; fruits including bananas, strawberries, cherries and citrus fruits; pulses such as green peas, kabuli chana and moong; oilseeds; certain animal feed products; groundnuts; honey; malt and its extracts; non-alcoholic beverages; flour and meals; starch; essential oils; ethanol for fuel; and tobacco.

Phased elimination of tariffs over up to ten years has been adopted for certain intermediate products used by India's food processing industry and sourced from multiple countries.

These include albumins; certain oils such as coconut oil, castor oil and cotton seed oil; hoofmeal; lard; stearin; modified starches; peptones and their derivatives; and plants and parts of plants etc. This extended timeline provides adequate adjustment space for domestic stakeholders.

For select sensitive agricultural products, the tariff reduction category has been applied to ensure that a measured level of duty protection continues.

Examples include parts of plants, olives, pyrethrum and oil cakes. Alcoholic beverages have been offered under tariff reduction along with minimum import price-based formulations, consistent with India's approach in other FTAs, according to a statement released today.

Certain highly sensitive items have been liberalised under Tariff Rate Quotas (TRQs), where limited quantities are allowed at reduced duties. Products under this category include in-shell almonds, walnuts, pistachios, lentils etc.

As per the government data, India maintains a trade surplus of USD 1.3 billion in agricultural trade with the United States, with exports of USD 3.4 billion and imports of USD 2.1 billion in 2024.

In an interview with ANI, yesterday, Union Commerce Minister Piyush Goyal said that India's agricultural products would face lower reciprocal tariffs than those of competitors, with certain items, including tea, coffee, spices, coconut, coconut oil, and vegetable wax, remaining zero-tariff.

"All our agri products now will have a lower reciprocal tariff than our competition at 18%. In addition, I'll read out some items where we reduced reciprocal tariffs to zero. As with tea and coffee, and their extracts, there'll be zero tariff. On spices, there'll be zero tariff. On coconut or coconut oil, there'll be zero tariffs. On vegetable wax, zero tariff," Goyal said.

On Saturday, Union Commerce Minister Piyush Goyal, while addressing a press conference, had said, "Agricultural products from Indian farmers will be exported to the United States at zero duty. At the same time, no tariff concessions have been granted for agricultural products from US farmers entering the Indian market."

"I can state categorically and without any hesitation that India's farmers, MSMEs, artisans, and craftsmen will not suffer any loss. On the contrary, India will benefit from greater access to the US market," the minister said.

- ANI