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India's agri and dairy sectors remain untouched under deal with US: Goyal
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Thursday, 05 February, 2026, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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Union Minister for Commerce and Industry Piyush Goyal has provided the first official government briefing on the newly announced India-US trade agreement. Amidst a backdrop of intense parliamentary debate and opposition scrutiny, Goyal categorically stated that India’s “red lines”—specifically the agriculture and dairy sectors—have remained untouched and fully protected under the deal.
Briefing Parliament, Goyal said, “During the negotiations, the India side has been successful in safeguarding the sensitive sectors including agriculture and dairy. I wish to reiterate before this august house that the major sensitives of India have been fully taken into account.”
Goyal added that this partnership will create new opportunities for SMEs, MSMEs, skilled workers and industries providing streamlined access to advanced technologies.
The announcement follows a breakthrough telephonic conversation between Prime Minister Narendra Modi and US President Donald Trump on Feb 2, which effectively ended a period of escalating tariff tensions.
The agreement centres on a significant reduction in trade barriers, positioning India as a more competitive player in the American market compared to its regional neighbours.
Although the actual deal is yet to be signed between the two sides, the United States has agreed to slash effective tariffs on Indian exports to 18%. This is a sharp decline from the peak of 50% that had been reached following a series of reciprocal hikes and punitive duties imposed last year.
The deal also effectively scraps the additional 25% punitive duty previously levied by Washington in response to India’s energy trade with Russia.
As per experts, at an 18% tariff rate, Indian goods now enjoy more favourable entry terms than competitors like Vietnam, Bangladesh, and China, whose products often face duties ranging from 20% to over 30%.
While the broad terms of the deal are now in the public domain, Goyal clarified that "technical processes" are still being finalised. A joint formal statement detailing the specific product-wise concessions is expected to be released shortly.
Experts' comments —
Anant Goenka, president, FICCI, said, “We thank Prime Minister Narendra Modi and President Donald Trump for the trade deal that marks a significant reset in India–US economic ties. The reduction of reciprocal tariffs on Indian goods to 18 per cent — following months of negotiation by the Commerce and Industry Minister and his team — will materially improve the competitiveness of Indian exports in the world’s largest import market. With sectors such as apparel, leather, gems and jewellery and marine products poised to benefit, this agreement has the potential to strengthen business confidence and deepen bilateral economic engagement. If implemented effectively, it can provide a meaningful boost to India’s export growth trajectory, broaden market access, and underscore the strategic importance of sustained cooperation between two of the world’s largest democracies.”
BJP MP & Secretary-General of the Confederation of All India Traders (CAIT) said, “This agreement will significantly enhance bilateral trade, attract greater investment, and create large-scale employment opportunities, particularly for India’s MSMEs, startups and manufacturing sector. It strongly complements the Make in India, Atmanirbhar Bharat and Vocal for Local initiatives by opening wider access for Indian products to the US market while strengthening domestic value chains.”
The Federation of Indian Export Organisations (FIEO) also welcomed the finalisation of the India–US Trade Deal.
Terming the development as a historic milestone and game-changer for Indian exporters, S C Ralhan, president, FIEO, said that the agreement would enhance the competitiveness of Indian products in the US market and provide a strong impetus to India’s export growth across sectors.
Ralhan highlighted that sectors such as engineering goods, textiles and apparel, pharmaceuticals, chemicals, leather products, gems and jewellery, and agricultural products are expected to gain significantly from the tariff rationalisation.
“Lower tariffs will not only improve price competitiveness but also help Indian exporters integrate more deeply into US supply chains. This agreement will encourage capacity expansion, attract fresh investments, and support job creation in export-oriented industries,” said Ralhan.
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