India-US Trade Deal: US President Donald Trump on Sunday announced a trade deal with India, highlighting that the agreement included a reduction in American tariffs on Indian goods to 18 percent. Prime Minister Narendra Modi and several government ministers described the deal as a major achievement. However, Opposition leaders, including Rahul Gandhi and Priyanka Gandhi, raised concerns that the agreement overlooked the interests of farmers and the dairy sector.
Responding to these concerns, Commerce and Industry Minister Piyush Goyal emphasised that no compromise had been made on the interests of the agriculture and dairy sectors. He added that the final details of the trade deal were still being finalised and that India and the United States would issue a joint statement soon.
Statements by President Trump and US Agriculture Secretary Brook Rollins have led to the controversy in New Delhi. The US president said that India would eliminate tariffs and non-tariff barriers on American goods, and that New Delhi had agreed to increase purchases of American products across energy, technology, agriculture, coal and other sectors worth over $500 billion.
The US Agriculture Secretary described the deal as beneficial for American farmers, highlighting that it would expand access to India’s vast market and help reduce the US agricultural trade deficit with India by $1.3 billion.
Analysts say the deal was delayed because India raised concerns. External Affairs Minister S. Jaishankar had earlier emphasised the need to protect the country’s priorities and “red lines”. India focussed on several issues in the trade deal, especially farming and dairy products.
India’s agriculture sector sustains around 70 crore people, representing nearly half of the country’s population, and employs about half of the workforce. Despite its central role in livelihoods, the sector contributes roughly 15 percent to India’s GDP.
The United States has long urged India to open its agricultural sector for trade. The nation has maintained a careful approach, citing food security, livelihoods and farmer welfare. Trade discussions have focussed heavily on agricultural exports, with India exporting rice, shrimp and spices, while importing nuts, apples and pulses from the United States.
Washington has sought greater access for crops like corn, soybeans and cotton to reduce its $45 billion trade deficit with India.
Experts have warned that concessions on tariffs could pressure India to reduce its minimum support prices (MSP) and public procurement, which safeguard farmers by ensuring fair prices and purchase guarantees.
The dairy sector has also been a major concern. India leads global milk production. It produced 23.92 crore tons in 2023-24 and exported 63,738 tons of dairy products valued at $27.26 million, mainly to the UAE, Saudi Arabia, the United States, Bhutan and Singapore. Import tariffs in India are substantial, with cheese at 30 percent, butter at 40 percent and milk powder at 60 percent. It makes imports from countries like New Zealand and Australia less profitable despite lower prices.
Experts say allowing American dairy products could cut local prices by at least 15 percent, possibly costing Indian farmers up to Rs 1.03 lakh crore a year and turning India from a milk producer into a milk importer.
A further issue in the dairy debate is “non-veg milk”. Reports suggest that some US dairy products use animal-based feed containing meat by-products, which is culturally sensitive in India. Milk from cows fed such feed is considered unsuitable for consumption by a large vegetarian population, creating additional concerns about opening India’s market to US dairy products.
Energy and oil purchases are a central point of discussion. The United States previously imposed punitive tariffs of 50 percent, including a 25 percent levy on Russian oil purchases by India. Trump has repeatedly pressed India to stop buying Russian crude and instead increase purchases of American oil. He claimed that India had agreed to end Russian oil imports and replace them with oil from the US and Venezuela.
Indian officials have not confirmed this publicly, though Russian oil imports have been declining. Petroleum Minister Hardeep Puri said that Russia’s supply to India had fallen to 1.3 million barrels per day (down from 1.8 million last year). India continues to assert strategic autonomy despite US pressure to reduce its ties with Russia.
Defence acquisitions are also expected to feature prominently in the deal. Experts suggest that the United States may press India for large-scale purchases across commercial aviation, helicopters and even nuclear reactors. While India continues to maintain strong defence ties with Russia, its share of Russian military imports has fallen from 82 percent during 2006-10 to 36 percent between 2020-24.
Trump had also offered F-35 fighter jets during a visit by Modi to Washington in February last year, though these jets are costly. Its each unit is priced at around $8 million. India faces a choice between purchasing the expensive F-35 or strengthening domestic production of Russian Su-57 stealth fighters while maintaining defence cooperation with Russia.
Analysts says that costs, maintenance and operational challenges of the F-35 present hurdles for India.
India’s trade deal with the United States spans multiple critical sectors. Agriculture, dairy, energy and defence all carry substantial economic, cultural and strategic considerations, making the path forward delicate.
Government sources indicate that negotiations are ongoing and that the final agreement will balance domestic priorities with opportunities for enhanced bilateral trade.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
