What Happened
- The proposed India-US Bilateral Trade Agreement (BTA) framework offers Indian agricultural exporters zero-duty access to a US agricultural import market worth approximately $46 billion
- India already holds a $1.3 billion surplus in agricultural trade with the US — exporting $3.4 billion while importing $2.1 billion in 2024
- The agreement is structured around three pillars: big export gains for key farm products, forestry-linked items for tribal and agroforestry incomes, and futuristic and livelihood crops supporting smallholders and women-led enterprises
- The marine sector alone gains access to a $25 billion US import market at the reduced 18% reciprocal tariff rate, expected to significantly support coastal livelihoods
Static Topic Bridges
India-US Trade Framework — From Reciprocal Tariffs to Interim Agreement
On February 6, 2026, the US and India announced a framework for an Interim Agreement on reciprocal and mutually beneficial trade. Under this framework, the US agreed to reduce the reciprocal tariff on Indian goods from 25% (which included a 25% base reciprocal tariff plus an additional 25% tariff linked to India's Russian oil purchases) to 18%. India, in turn, committed to eliminate or reduce tariffs on all US industrial goods and a wide range of US agricultural and food products. The framework also includes rules of origin provisions to ensure that the agreed benefits accrue predominantly to products originating in the US and India, preventing third-country free-riding.
- US reciprocal tariff on India reduced from 50% (cumulative) to 18%
- India committed to purchasing over $500 billion of US energy, ICT, agricultural, coal, and other products over 5 years
- India agreed to remove digital services taxes and negotiate bilateral digital trade rules
- Framework launched following a February 13, 2025 agreement between President Trump and PM Modi for broader BTA negotiations
- India-US bilateral trade in FY25 stood at a record $132.2 billion (India's exports: $86.51 billion; trade surplus: $40.82 billion)
Connection to this news: The zero-duty agricultural access for specific Indian farm products is a key component of this broader interim trade framework, offering immediate benefits to Indian agricultural exporters while the comprehensive BTA is negotiated.
Agricultural Trade Policy — Tariffs, Market Access, and WTO Framework
International agricultural trade operates within the WTO Agreement on Agriculture (AoA), which covers three pillars: market access (tariff reductions), domestic support (subsidies), and export subsidies. India has been a strong advocate at WTO for food security concerns of developing nations, particularly through the G-33 group. India's applied tariff rates on agricultural products are generally higher than its bound rates for industrial goods, providing policy space for protection of sensitive crops. The concept of "zero-duty access" in bilateral agreements means that specific product lines can enter the partner country without any customs duty, directly improving the price realisation for exporters.
- WTO Agreement on Agriculture came into force in 1995 under the Uruguay Round
- India's average applied agricultural tariff: approximately 35-40% (among the highest globally)
- India currently provides zero-duty access to the US for products worth $1.4 billion — including spices, tea, coffee, fruits, processed foods, and essential oils
- The concept of "preferential access" at 18% means products face the reduced reciprocal tariff rather than MFN or higher rates
- Marine products from India to the US were valued at $2.45 billion, while the total US marine import market is $24.89 billion
Connection to this news: The BTA framework significantly expands India's preferential access to the US agricultural market, combining zero-duty lines with reduced tariff rates on a broader product range, creating a structured pathway for Indian agricultural export growth.
Marine Products Export Development Authority (MPEDA) and India's Seafood Exports
India is a major global exporter of marine products, with the Marine Products Export Development Authority (MPEDA) — established under the MPEDA Act, 1972 — serving as the nodal agency for promotion of marine products exports. India's marine exports are dominated by frozen shrimp, which accounts for approximately 40% of export value. The sector is critical for coastal livelihoods, supporting millions of fisherfolk across coastal states including Gujarat, Maharashtra, Kerala, Tamil Nadu, Andhra Pradesh, and West Bengal. The US is one of India's top three marine export destinations alongside the EU and Japan/Southeast Asia.
- India is the 4th largest fish producer globally and 2nd largest aquaculture producer
- Marine product exports in FY 2024-25: approximately $7-8 billion
- US marine import market: $24.89 billion (India's current share: ~$2.45 billion or ~10%)
- Key exported species: frozen shrimp (Vannamei and Black Tiger), frozen fish, frozen squid and cuttlefish
- MPEDA established: 1972 under the Marine Products Export Development Authority Act
Connection to this news: The 18% preferential tariff access to the $25 billion US marine import market under the BTA could substantially boost India's marine exports, given that India currently supplies only about 10% of US marine imports, indicating significant room for growth.
Key Facts & Data
- India-US agricultural trade surplus: $1.3 billion (India exported $3.4 billion, imported $2.1 billion in 2024)
- US agricultural import market size: ~$46 billion
- US marine import market size: $24.89 billion; India's current share: $2.45 billion
- India-US bilateral trade (FY25): $132.2 billion (record high)
- India's trade surplus with US (FY25): $40.82 billion
- Reciprocal tariff rate: 18% (reduced from 50% cumulative)
- India's commitment: $500 billion in US product purchases over 5 years
- Indian spice exports to US: $358 million; rice: $389 million; tea and coffee: $82.5 million