India and the United States have worked up the framework of an interim trade agreement that aims to reset tariffs, ease long‑running trade tensions and expand market access on both sides. The deal has come after months of negotiations and political back‑and‑forth, with both governments presenting it as a step towards a larger bilateral trade pact. Under the new framework, the United States will lower duties on several Indian exports, and India will reduce or eliminate tariffs on selected American food and agricultural items.
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This move is expected to make certain imported foods cheaper for Indian consumers, even as the government has kept key farm sectors fully protected. The agreement also includes commitments to address non‑tariff barriers and improve regulatory cooperation, alongside broader discussions on sensitive market areas and future tariff roadmaps.
What Remains Fully Protected
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India has made it clear that the new tariff cuts will not touch its most sensitive food sectors. These protections are central to the government's political position and rural economic priorities.
1. Staple Grains and Cereals
India has not offered any tariff concessions on major staples. These items remain completely protected:
- Wheat
- Rice
- Maize
- Millets such as jowar, bajra, ragi, foxtail millet and others
- Barley and oats
2. Dairy Products
The dairy sector has been kept entirely outside the scope of tariff cuts. Products that remain fully safeguarded include:
- Milk
- Cheese
- Butter and ghee
- Cream, yoghurt, buttermilk and whey
3. Poultry, Meat and Key Vegetables
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The deal does not change import duties on:
- Poultry
- Meat categories
- Vegetables including potatoes, peas, beans and mushrooms
- Pulses commonly grown by small farmers
These exclusions underline the government's position that the deal will not harm domestic farmers or disrupt local supply chains.
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What Will Get Cheaper Now
While India has ring‑fenced its core food sectors, it has opened the door to several US‑origin foods that are now set to become more affordable.
1. Animal Feed Ingredients
Import duties will be cut for key feed materials used by livestock and poultry producers. These include:
- Dried distillers grains (DDGS) used as a protein‑rich feed input
- Red sorghum used in animal feed
This may reduce input costs for feed manufacturers, which could also influence downstream pricing in related sectors.
2. Tree Nuts
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Tariff cuts will apply to several US‑origin nuts that are widely consumed in India:
- Almonds
- Pistachios
- Walnuts
These items are expected to see lower landed prices, particularly in retail and food processing.
3. Fresh and Processed Fruits
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India will reduce duties on a broad range of fresh and processed fruits imported from the United States. Some fruits, such as apples, will enter under quota‑based limits with a minimum import price to protect domestic growers.
4. Soybean Oil
Soybean oil from the United States will face reduced tariffs under the interim framework. Although sensitive items are placed under tariff‑rate quotas, the agreed cuts still apply within those caps. This is significant because India has a large edible oil import requirement.
5. Wine and Spirits
American wines and spirits will also become cheaper, with duty reductions coming into effect under the new agreement. Minimum import price provisions will remain in place, but prices are still expected to ease.
These changes may benefit hospitality businesses and retailers who rely on imported beverage lines.