India has fully protected the interests of its agriculture and dairy sector in the India-US trade agreement.
It is important to understand why India is protecting its agriculture and dairy sector. Here is a list of key indicators to illustrate this issue:
Agriculture is sensitive in India
Agriculture and allied activities such as animal husbandry form the backbone of India’s rural economy, providing employment to more than 700 million people. Unlike developed economies, where agriculture is highly mechanized and corporatized, in India it is a livelihood issue.
Giving import duty concessions in the agricultural sector to companies from developed countries that provide heavy subsidies to their farmers will mean an influx of cheap food grains and products into India. This will have a serious impact on the income and livelihood of Indian farmers.
global agricultural trade scenario
According to reports, more than 90 percent of the global food trade is controlled by about five multinational corporations, which have historically used predatory pricing strategies.
If India reduces protection, domestic farmers could be at the mercy of these global giants, which would have serious political and economic consequences. This makes agriculture a controversial issue for the Government of India.
Developed nations want more market access
Agriculture in India is not just an economic activity but a way of life, supporting more than 700 million people. India is largely self-sufficient in food production, while agriculture is a major trade industry for countries like the US, Australia and the European Union.
According to a report, in 2024, US agricultural exports were worth US$176 billion, which was about 10 percent of its total merchandise exports.
With large-scale mechanized farming and heavy government subsidies, the US and other developed countries see India as an attractive market to expand their exports.
agricultural security
India’s agricultural sector is currently protected by moderate to high tariffs or import duties and regulations to protect domestic farmers from unfair competition. Opening up an area means curbing imports and reducing tariffs.
Types of Import Duty in India
India maintains a tariff structure ranging from zero to 150 percent to protect its agricultural sector. The US also imposes high tariffs on select agricultural goods – for example, tobacco (350 percent).
Additionally, according to one expert, the US applies complex non-ad valorem (NAV) tariffs that make imports more expensive, a fact that is often ignored in trade discussions.
United States agricultural exports to India
US agricultural exports to India were worth $1.6 billion in 2024. Major exports include – Almonds (in shell – $868 million); Pistachios ($121 million), Apples ($21 million), Ethanol (ethyl alcohol – $266 million).
Trade experts have said that the US subsidizes its agricultural sector extensively and in fact in some years, subsidy levels have exceeded 50 percent of the production value for some products, such as: rice (82 percent), canola (61 percent), sugar (66 percent), cotton (74 percent), mohair (141 percent), wool (215 percent).
Are all agricultural products sensitive?
Given that more than 50 percent of India’s population depends on agriculture for its livelihood, India considers the entire sector as vulnerable. Import or customs duties are particularly important for staple crops, dairy and key agricultural products that sustain rural livelihoods.
World Trade Organization rules
India’s agricultural tariffs do not violate WTO commitments. The rules allow member countries to protect sensitive sectors, particularly those related to food security and rural employment, which are important for India.
India’s agricultural exports
In FY2025, India’s total agricultural exports are expected to increase from $45.7 billion in 2023-24 to over $51 billion, with a portion of it going to the US ($5 billion). India’s total exports in FY25 were $437 billion.
India aims to reach combined exports of agriculture, marine products and food and beverages to $100 billion in the next four years.
According to World Trade Organization data, India is the world’s second-largest agricultural producer by value, accounting for only 2.2 percent of global agricultural exports, up from 1.1 percent in 2000.
Main exports include tea, coffee, rice, some cereals, spices, cashew nuts, oil meals, oilseeds, fruits and vegetables.
Non-tariff issues in agriculture
Tariffs are only one part of the trade equation. Non-tariff measures also play an important role in restricting market access.
According to Ajay Srivastava, founder of GTRI, the US has complex sanitary and phytosanitary (SPS) regulations that often act as hidden trade barriers.
For example, the maximum residue limits (MRLs) imposed by the US on pesticides and chemicals in agricultural products are among the most stringent in the world, making compliance difficult for developing countries, including India.
Published on February 4, 2026
