India to keep agriculture, dairy outside U.S. trade deal framework

India is expected to maintain its long-standing position of excluding sensitive agricultural goods and dairy products from the trade deal with the U.S., according to a government source cited by Moneycontrol, indicating that these sectors will remain protected despite broader tariff reductions.

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The government source told Moneycontrol that India’s established stance on agriculture and dairy continues unchanged, and that these categories are unlikely to be included in any significant market-access commitments under the proposed trade arrangement. The position aligns with India’s approach in recent trade negotiations, where similar exclusions were applied.

Continuity with earlier trade agreements

India has historically kept key farm products and dairy items outside the scope of tariff liberalisation in trade deals signed with the United Kingdom, New Zealand, and the European Union, according to details reported by Moneycontrol. These exclusions have been kept in place to protect domestic producers and the current rules that govern agricultural trade.

Following this strategy in negotiations with the U.S. shows that India is sticking to its negotiating priorities, especially in areas that are seen as politically and economically sensitive.

Trade deal announcement and tariff changes

U.S. President Donald Trump announced the India-U.S. trade deal on February 2 via a post on Truth Social. According to the announcement, the agreement provides for a rollback of reciprocal tariffs that were imposed from mid-2025.

As part of the deal, reciprocal tariffs on Indian goods entering the U.S. are set to be reduced to 18%, based on details shared in the announcement and reported by Moneycontrol.At the same time, duties on American goods brought into India are expected to drop to zero, but only after all paperwork and implementation terms are met.

The tariff cut is a big change from the previous system of reciprocal tariffs, and it is the main business part of the deal that the U.S. government announced.

Status of negotiations and documentation

The government source cited by Moneycontrol stated that negotiators from India and the U.S. are currently engaged in preparing the documentation related to the trade deal. Discussions between the two sides are ongoing, focusing on formalising the terms that were publicly announced.

At this point, the form of the agreement has not been finalized. It remains unclear whether the announced deal represents the first tranche of a broader Bilateral Trade Agreement or constitutes a comprehensive BTA in itself.