India has maintained a firm stance on protecting its agriculture and dairy sectors during recent trade negotiations with the United States. This position reflects the critical role these sectors play in India's rural economy, employing millions of people. The Indian government has consistently prioritized the interests of its farmers and those involved in animal husbandry and dairy.

Safeguarding these sectors is essential to prevent a surge of cheap imports that could negatively impact Indian farmers. Developed countries often seek greater access to markets for their subsidized agricultural products, creating a potential imbalance for domestic producers in India. To counter this, India maintains tariffs to shield its agricultural sector from what it perceives as unfair competition.

Commerce Minister Piyush Goyal has emphasized that Prime Minister Narendra Modi has always prioritized the interests of farmers, animal husbandry, and dairy, ensuring their protection in trade deals. As a result, sensitive items like cereals, maize, soybean, and genetically modified foods are likely to be excluded from the bilateral trade agreement with the U.S..

The trade deal between India and the U.S. aims to bolster bilateral trade and support Indian exporters facing competition from countries with lower duties. The agreement exempts Indian dairy and other "sensitive" agricultural items. It also makes over $40 billion worth of Indian goods eligible for zero-duty access and reduces customs duties on labor-intensive Indian merchandise such as textiles, leather goods, marine products, chemicals, and certain processed food items to 18% from day one.

Following announcements by Prime Minister Modi and U.S. President Donald Trump regarding the trade agreement, the Indian government has asserted that sectors like textiles, leather, marine products, and gems and jewellery are expected to benefit from the deal, which is anticipated to be finalized in the coming weeks.

The announcement of the trade pact is expected to boost Indian exports and position India as a key alternative to China in global supply chains. The deal is expected to give India a strategic edge, especially against China. The agreement slashes tariffs on Indian exports to the U.S. down to 18% from 50%, which is lower than rates imposed on competitors. China continues to face tariffs of 47%, while Pakistan and Bangladesh are at 20%, and Vietnam and Indonesia hover around 19-20%.

According to sources, India may get zero-duty exports to the U.S. for goods worth approximately $10 billion, similar to what America offers to the majority of its FTA partners.