What Happened
- Commerce Minister Piyush Goyal stated that all sensitive agricultural items have been kept out of the India-US interim trade deal, asserting that no item in the agreement would hurt Indian farmers.
- The protected list includes wheat, rice, millets, soyameal, corn, GM food products, spices, potato, dairy products, meat, poultry, and major fruits including apples.
- The government claimed that 90-95% of Indian agricultural products remain outside the purview of tariff concessions.
- India opened up sectors where it needs imports, including industrial goods, select food items like tree nuts and cranberries, and inputs like DDGS for the animal feed industry.
- Opposition parties and farmer unions challenged this characterisation, arguing that the deal would indirectly harm farmers through price depression from competing imports like soybean oil and DDGS.
Static Topic Bridges
India's Agricultural Trade Policy: Protection vs. Liberalisation Debate
India has historically maintained a protective stance on agricultural trade, rooted in food security concerns and the livelihood dependence of nearly 42-43% of the workforce on agriculture. This protectionist approach manifests through high tariffs, quantitative restrictions, and the use of safeguard mechanisms.
- Agriculture contributes approximately 18% of India's GDP but employs 42-43% of the workforce, making it politically sensitive
- India's average applied tariff on agricultural products (30-40%) is significantly higher than for industrial goods (~13%)
- India has invoked the Special Safeguard Mechanism (SSM) at the WTO to protect against import surges in agriculture
- At the WTO, India has consistently demanded a permanent solution on public stockholding for food security, resisting pressure to limit its MSP-based procurement programmes
- India has kept agriculture largely outside its recent bilateral agreements (e.g., limited agricultural concessions in ASEAN FTA, Japan CEPA)
Connection to this news: The government's decision to exclude 90-95% of agricultural products from the deal continues India's established stance of shielding domestic agriculture in trade negotiations, using industrial and non-sensitive goods as the primary concession space.
Food Security and the National Food Security Act (NFSA)
India's food security architecture, anchored by the NFSA 2013, provides subsidised food grains to approximately 813 million people (~60% of the population). This system depends on government procurement of rice and wheat at MSP, creating a direct link between agricultural trade policy and food distribution.
- NFSA 2013 provides 5 kg of food grains per person per month at Rs 1/kg (rice), Rs 2/kg (wheat), and Rs 3/kg (coarse grains) to priority households
- The Food Corporation of India (FCI) procures approximately 60-80 million tonnes of rice and wheat annually at MSP for the central pool
- Total food subsidy expenditure exceeded Rs 2 lakh crore annually in recent years
- India maintains buffer stock norms: 21.04 million tonnes for rice and wheat combined (as on 1 July each year)
- Any trade liberalisation in grains could affect procurement volumes, buffer stocks, and the fiscal cost of the food subsidy programme
Connection to this news: Keeping rice, wheat, and millets out of the trade deal protects the procurement-distribution chain under NFSA, ensuring that import competition does not undermine the government's ability to procure at MSP and distribute through the Public Distribution System.
Political Economy of Agricultural Trade in India
Agricultural trade liberalisation in India intersects with electoral politics, given that farming communities constitute a significant vote bank. Historical precedents show that trade-related agricultural distress can trigger political consequences.
- The 2020-21 farmer protests against three farm laws demonstrated the political sensitivity of agricultural policy reforms
- Opposition to agricultural imports has historically crossed party lines, with both ruling and opposition parties using farmer protection as a political platform
- India's withdrawal from the Regional Comprehensive Economic Partnership (RCEP) in 2019 was partly driven by concerns over agricultural imports from Australia and New Zealand
- States like Maharashtra (soybean), Madhya Pradesh (soybean, wheat), Punjab (wheat, rice), and Karnataka (maize) have distinct crop-specific trade sensitivities
- A coalition of major trade unions and farmer groups called a nationwide strike on 13 February 2026 to protest the interim deal, despite the government's assurances
Connection to this news: The government's emphasis on farmer protection reflects the political calculus of trade negotiations, where the domestic political cost of perceived agricultural harm can outweigh the economic benefits of broader trade liberalisation.
Key Facts & Data
- 90-95% of Indian agricultural products excluded from the deal
- Protected crops: wheat, rice, millets, soyameal, corn, potato, all GM products, spices, major fruits including apples
- Protected animal products: dairy, meat, poultry
- Agriculture employs 42-43% of India's workforce, contributes ~18% of GDP
- NFSA covers approximately 813 million people (~60% of population)
- India's average applied tariff on agricultural products: 30-40%
- Nationwide strike by farmer and trade unions called on 13 February 2026 to protest the deal
- India withdrew from RCEP in 2019 partly over agricultural import concerns