The proposed India–US trade deal is framed by the government as a balanced package that protects India's most vulnerable farming and food sectors while unlocking broader export opportunities for Indian manufacturers, tech establishments and labour-intensive industries.
Commerce Minister Piyush Goyal emphasised that the agreement preserves protections for farmers, dairy producers and rural jobs, even as it offers deeper access to the large US market for a wide range of Indian goods. He noted that India will benefit from a lower uniform US tariff on many products, while India itself has not opened its doors to sensitive US farm imports that could undermine domestic livelihoods.
On the protected side, the government specifies a robust list of zero-tariff concessions that will remain intact. Staple crops and core food items, including wheat, rice, maize, soya and oilseeds, poultry and several meat categories, ethanol, and tobacco, will continue to carry high duties with no new access for US exporters.
The entire dairy sector is categorically protected, with milk, cheese, butter, ghee, cream, yoghurt, buttermilk and whey all described as “100 percent secure,” meaning no market opening for US dairy products.
A substantial array of vegetables, fruits and processed foods also remains fully protected, spanning fresh and processed vegetables, dried pulses and onions, as well as sensitive fruits like bananas, mangoes and various citrus and berry varieties. Spices, tea and other culturally significant flavour products are likewise safeguarded, ensuring that agriculture, dairy, spices and tea stay off the table for American access.
In contrast, the deal opens certain sectors to lower tariffs, particularly those outside the sensitive farm category. Industrial and manufactured goods such as machinery, electricals, vehicles and components, and chemicals see tariff reductions or eliminations, aligning with India’s broader goal of strengthening its manufacturing base and export capacity.
The technology and data infrastructure segments feature reduced duties on high-end servers, AI hardware and GPUs, data-centre equipment, and semiconductor inputs, reflecting an intent to bolster India’s tech ecosystem and competitiveness in global markets.
Non-sensitive agricultural and food items, including dried distillers grains, red sorghum, tree nuts, soybean oil, select fruits and wines, as well as certain other options, also face tariff reductions.
From the US perspective, the agreement commits to applying a uniform 18 percent tariff on a broad set of Indian exports that previously faced higher duties. Beneficiary sectors include textiles and apparel, leather and footwear, plastics and rubber goods, home décor and carpets, machinery and chemicals, artisanal goods, pharmaceuticals, gems and diamonds, and aircraft parts.
The deal also accompanies takedowns of some prior metal-security tariffs on certain Indian products, easing some tariff frictions and enhancing the appeal of Indian-made goods in the US market. This approach is intended to support a more diversified and resilient export profile for India, while giving the US access to a wider array of Indian products at lower tariff levels.
Alcohol policy within the deal is notable for its positioning; alcohol is placed in the opened category rather than the protected one. The reform envisages a substantial reduction in duties on imported spirits, with duties on whisky, gin, rum and similar products dropping from around 150 percent to an estimated 30–40 percent under the new framework.
This change has a dual effect: it sharpens price competitiveness for imported spirits and broadens consumer choice in India, potentially expanding the Indian market for both US and European whiskies.
The cost implications could see mid-range imported spirits becoming more affordable, thereby benefiting international brands and, to some extent, consumers, while creating pricing pressure for Indian craft spirits unless they differentiate through flavour, storytelling and heritage.
Proponents argue the deal maintains a protective shield for India’s farming and dairy sectors while delivering meaningful access and growth opportunities in high-value manufacturing, technology, and other non-sensitive sectors.
They point to a uniform 18 percent tariff on many Indian exports to the US, which could simplify trading terms and foster more predictable business planning for Indian producers. Critics might question the true extent of protection for vulnerable farmers, given the breadth of the protected lists, and raise concerns about any potential exposure of sensitive livelihood sectors to external competition in the longer term.
The overall economic effect will hinge on how Indian industry leverages the access gained, whether domestic producers can upgrade to compete in higher-value segments, and how consumer prices respond to tariff shifts on imported products, particularly in the spirits market.
Agencies
