What Happened
- Jammu and Kashmir Chief Minister Omar Abdullah raised concerns in the J&K Legislative Assembly during the Budget 2026-27 debate that the India-US interim trade deal would severely impact the Union Territory's horticulture and dry fruit sectors.
- Abdullah stated that tree nuts (almonds, walnuts, pistachios) and dry fruits from the US would be allowed to enter India at zero or significantly reduced duties under the deal, directly competing with J&K's key agricultural products.
- He highlighted that J&K depends heavily on apples, saffron, almonds, walnuts, and kiwi, and that duty-free imports of these products from the US would harm local farmers.
- The Assembly witnessed heated scenes, with BJP legislators demanding an apology from the Chief Minister over remarks they described as "unparliamentary," leading to a walkout.
- Abdullah ruled out an apology but indicated willingness to withdraw his words, noting he was unable to speak in the House amid repeated disruptions.
Static Topic Bridges
India-US Interim Trade Deal (February 2026)
The India-US interim trade deal, announced on February 6, 2026, represents the first structured bilateral trade agreement between the two countries. It establishes a framework for tariff reductions across industrial and agricultural goods, with the US lowering its reciprocal tariff on Indian goods from 25% (initially raised to 50%) to 18%, while India eliminates or reduces tariffs on a wide range of US products.
- India agreed to eliminate or reduce tariffs on US industrial goods and a wide range of agricultural products, including tree nuts (almonds, pistachios, walnuts), fresh and processed fruits, soybean oil, dried distillers' grains (DDGs), red sorghum, wine and spirits
- US lowered reciprocal tariff on Indian goods to 18%, with zero tariff on specific sectors including generic pharmaceuticals, gems and diamonds, and aircraft parts
- India committed to a US $500 billion purchasing commitment
- This is described as an "interim" agreement — a precursor to a potential comprehensive trade deal
- This is distinct from FTAs India has with other partners such as India-UAE Comprehensive Economic Partnership Agreement (CEPA, effective May 2022), India-Australia Economic Cooperation and Trade Agreement (ECTA, effective December 2022)
Connection to this news: Omar Abdullah's concerns are specifically about the agricultural component of this deal — the zero or reduced tariffs on US tree nuts and fruits that would directly compete with J&K's primary agricultural products, potentially undercutting local producers who lack the scale economies of US agribusiness.
J&K's Horticulture Sector — Backbone of the Rural Economy
Horticulture is the mainstay of J&K's rural economy, contributing approximately 8% to the Union Territory's GSDP and providing direct and indirect employment to about 23 lakh people, generating approximately 8.5 crore man-days annually. Apple alone accounts for over 60% of India's total apple production.
- Apple: 1,64,141 hectares under cultivation; production of 20-25 lakh MT annually; constitutes 43.53% of total area under fruit in J&K; accounts for over 60% of India's total apple production
- Walnut: 95,601 hectares; J&K constitutes 85.05% of India's total area under walnut cultivation
- Almond: 17,247 hectares; approximately 10,000 MT annual production
- Saffron: J&K is India's sole saffron-producing region; Kashmir Saffron received GI tag in May 2020
- Total horticulture revenue: over Rs 6,300 crore during 2021-22
- J&K has been declared an Agri Export Zone for apples and walnuts
- The sector's growth: production rose from 1.83 lakh MT (1972-73) to over 24.94 lakh MT (2021-22)
Connection to this news: The trade deal's provision for zero-duty import of US tree nuts and fruits directly threatens this sector. US almonds (primarily from California, the world's largest producer) and walnuts would enter the Indian market at significantly lower prices than J&K's production costs, potentially devastating the Union Territory's primary livelihood source.
Geographical Indications (GI) Tags — Protection for Regional Agricultural Products
A Geographical Indication (GI) is an intellectual property right that identifies a product as originating from a specific geographical location, where a given quality, reputation, or characteristic is essentially attributable to that origin. In India, GIs are governed by the Geographical Indications of Goods (Registration and Protection) Act, 1999, administered by the Controller General of Patents, Designs and Trade Marks, with the GI Registry located in Chennai.
- Kashmir Saffron: received GI tag in May 2020; grown in Pulwama, Budgam, Kishtwar, and Srinagar regions; recognised for its unique characteristics (longer and thicker stigma, natural deep-red colour, high crocin content)
- GI tags help in brand protection and premium pricing, but do not provide tariff protection against imports
- India has over 500 registered GIs across agricultural products, foodstuffs, handicrafts, and manufactured goods
- Other notable J&K GIs: Kani Shawl, Pashmina, Sozni Craft, Khatamband, Papier-mache
- Under WTO's TRIPS Agreement (Article 22-24), GIs receive intellectual property protection, but this applies to authenticity verification, not trade barrier creation
- GI protection can help differentiate J&K products in the market (e.g., "Kashmir Saffron" vs imported saffron), but cannot prevent tariff reduction under bilateral trade deals
Connection to this news: While GI tags protect the identity and authenticity of J&K products, they do not shield local producers from price competition with zero-duty imports. The concern raised by Omar Abdullah is about tariff protection, not brand protection — GI-tagged Kashmiri walnuts and saffron may retain their brand premium, but the broader horticulture sector (especially apples and almonds) faces direct price competition.
Trade Agreements and Agriculture — WTO Framework and India's Position
India has historically been protective of its agricultural sector in trade negotiations, maintaining high tariffs on agricultural imports and invoking special safeguard mechanisms. Under the WTO Agreement on Agriculture (AoA), countries commit to tariff bindings and reduction, but developing nations like India have wider latitude to protect sensitive agricultural products.
- WTO Agreement on Agriculture: three pillars — Market Access (tariff reduction), Domestic Support (AMS reduction), and Export Competition (subsidy elimination)
- India's applied tariffs on agricultural products are generally lower than its bound rates, providing policy space — e.g., India's bound tariff on almonds is 100%, but applied tariff is approximately 42%
- The concept of "Special Products" (SPs) and "Special Safeguard Mechanism" (SSM) allows developing countries to shield a limited number of products from full tariff liberalisation based on food security, livelihood security, and rural development criteria
- India has been a strong advocate for SPs and SSM at the WTO, particularly at the failed Doha Round
- Bilateral/interim trade deals can override WTO-applied tariffs if both parties agree — which is what the India-US deal does for tree nuts
- Agricultural trade liberalisation impact varies significantly by crop and region — the J&K horticulture sector is particularly vulnerable due to high production costs, small landholdings, and limited mechanisation
Connection to this news: The interim trade deal's zero-duty provision for US tree nuts and fruits effectively bypasses the tariff protection India maintained on these products. Abdullah's concern reflects the broader debate about whether bilateral trade deals adequately consider the differential regional impact on agriculture, particularly for horticulture-dependent regions like J&K.
Key Facts & Data
- India-US interim trade deal announced: February 6, 2026
- US reciprocal tariff on India: reduced from 25% (initially 50%) to 18%
- J&K horticulture contribution to GSDP: approximately 8%
- J&K horticulture employment: 23 lakh people; 8.5 crore man-days annually
- J&K apple production: 20-25 lakh MT annually; over 60% of India's total
- J&K walnut cultivation: 95,601 hectares; 85% of India's total walnut area
- Kashmir Saffron GI tag: May 2020
- India's total horticulture revenue from J&K: over Rs 6,300 crore (2021-22)
- Key US exports to India under deal: almonds, walnuts, pistachios, fresh and processed fruits, soybean oil, DDGs