What Happened
- Multiple farmer unions and trade unions have announced a nationwide strike (Bharat Bandh) on February 12, 2026, protesting the India-US interim trade deal framework announced on February 6.
- The unions allege that the government has "surrendered" to the US by opening up the Indian agriculture sector to American multinational companies.
- Key concerns centre on tariff reductions on agricultural products such as soybean oil, dried distillers' grains (DDGs), red sorghum, tree nuts, fresh and processed fruit, certain pulses, wine and spirits.
- Farm leaders warn that increased imports, particularly of soybean oil, could depress domestic farmgate prices, with soybean prices already significantly below the MSP of Rs 5,328 per quintal.
- The government asserts that sensitive agricultural sectors (wheat, rice, sugar, dairy, meat, poultry, maize, millets) have been deliberately excluded from the deal.
Static Topic Bridges
India-US Interim Trade Deal Framework (February 2026)
India and the United States announced a framework for an Interim Agreement on reciprocal trade on February 6, 2026, following a call between President Trump and Prime Minister Modi. Under this framework, the US agreed to reduce tariffs on Indian goods from 50% to 18%, while India committed to eliminating or reducing tariffs on all US industrial goods and a range of agricultural products.
- India's commitments include tariff elimination/reduction on DDGs, red sorghum, tree nuts, fruit, soybean oil, wine and spirits, and "certain pulses" (mentioned in the White House fact sheet but absent from the original joint statement)
- India agreed to a strategic purchasing commitment of $500 billion in US energy products, aircraft, precious metals, technology products, and coking coal over five years
- The framework envisages further negotiations toward a comprehensive Bilateral Trade Agreement (BTA)
- India currently maintains average agricultural tariffs of approximately 37%, among the highest of any major economy
Connection to this news: The tariff concessions on agricultural imports are the primary trigger for farmer opposition, with unions arguing that cheaper American farm products will undercut domestic producers and depress prices already below MSP levels.
Minimum Support Price (MSP) Mechanism
The Minimum Support Price is a floor price at which the Government of India procures agricultural commodities from farmers, serving as a price support mechanism to protect them from market volatility. The Commission for Agricultural Costs and Prices (CACP) recommends MSPs, which are then approved by the Cabinet Committee on Economic Affairs (CCEA).
- CACP was established in 1965 (originally as the Agricultural Prices Commission); renamed CACP in 1985
- MSP is currently announced for 22 mandatory crops and sugarcane (Fair and Remunerative Price)
- The government committed in 2018 to setting MSP at 1.5 times the cost of production (A2+FL formula)
- MSP has no statutory backing — it remains an administrative price support, unlike the legally mandated FRP for sugarcane under the Sugarcane Control Order, 1966
- The Swaminathan Commission (2006) had recommended MSP at C2+50% (comprehensive cost including land rent)
Connection to this news: Farmer unions argue that tariff reductions on imports like soybean oil will further depress market prices below already-set MSP levels, making the MSP mechanism ineffective even where procurement exists.
WTO Agreement on Agriculture (AoA)
The WTO Agreement on Agriculture, which came into effect in 1995, established rules governing agricultural trade subsidies and market access. It covers three pillars: market access (tariff bindings), domestic support (Aggregate Measurement of Support), and export subsidies.
- India's bound tariffs on agricultural products (the maximum permissible under WTO) are significantly higher than applied tariffs — for example, bound tariff on rice is 80%, on wheat is 100%
- India is classified as a developing country under WTO, entitling it to Special and Differential Treatment provisions
- The Peace Clause (Bali Ministerial, 2013) temporarily shields India's food procurement programmes from WTO dispute challenges
- India has consistently demanded a Permanent Solution for public stockholding for food security at WTO negotiations
Connection to this news: The interim trade deal's tariff reductions operate within the space between India's bound and applied tariff rates, but farmer unions fear that bilateral commitments could constrain India's future flexibility on agricultural tariff policy.
Key Facts & Data
- India's pulses import bill: $5.48 billion in FY 2024-25, up 46% from $3.75 billion in FY 2023-24
- US share of India's pulse imports: only $89.65 million of the $5.48 billion total
- India's lentil imports from the US: $78 million, ranking third after Canada ($466 million) and Australia ($328 million)
- Current lentil import duty: 10%; yellow pea duty: 30% (from November 1, 2025); tur and urad: duty-free until March 31, 2026
- US tariff on Indian goods under the deal: reduced from 50% to 18%
- India's average agricultural tariff: approximately 37%