The interim US–India trade pact delivers immediate relief to Indian exporters. With the removal of the additional 25% penalty from 7 February 2026, India’s effective reciprocal tariffs fall from 50% to 25%, easing pressure on MSME-driven sectors. While India has agreed to reduce or eliminate tariffs on select US industrial and agricultural products, it has clearly stated that no market segment has been opened in a manner that could harm Indian farmers, with all major crops, food grains, fruits, and dairy products remaining protected. Alongside commitments to address non-tariff barriers by both countries, the US decision to further lower reciprocal tariffs to 18% once the agreement is finalised signals stronger strategic and economic alignment and sets the stage for a deeper, more balanced India–US trade relationship.
For the agriculture sector, the interim US–India trade pact adopts a calibrated and balanced approach. India will reduce or eliminate tariffs on a limited set of US food and agricultural products and address long-standing non-tariff barriers, while safeguarding Indian farmers. Major crops, food grains, fruits, and dairy products remain protected, and the market has not been opened to genetically modified crops. While India continues to export significantly more agricultural products to the US than it imports, US farm exports of tree nuts, cotton, and soybean oil to India could grow under the pact. Overall, the agreement supports a stable and balanced agri-trade relationship without putting pressure on Indian farmers.
