India adopts phased tariff cuts up to 10 years while shielding sensitive farm sectors: Centre

The Centre on Monday said India has adopted a calibrated tariff liberalisation approach under the India-US Bilateral Trade Agreement, allowing duty elimination in phases of up to 10 years for select products while keeping highly sensitive agricultural sectors fully protected.According to a government statement as reported by ANI, agricultural market access for the United States has been structured based on product sensitivity, in line with India’s approach in previous trade agreements. The offer has been categorised into immediate duty elimination, phased elimination (up to 10 years), tariff reduction, margin of preference and tariff rate quota mechanisms. Highly sensitive agricultural sectors remain fully protected under a “carefully crafted exemption category”. These broadly include meat, poultry and dairy products; GM food products; soyameal; maize; cereals; millets such as jawar, bajra, ragi, kodo and amaranth; fruits including bananas, strawberries, cherries and citrus fruits; pulses such as green peas, kabuli chana and moong; oilseeds; certain animal feed products; groundnuts; honey; malt and its extracts; non-alcoholic beverages; flour and meals; starch; essential oils; ethanol for fuel; and tobacco.The government said phased tariff elimination of up to ten years has been adopted for certain intermediate products used by India’s food processing industry and sourced from multiple countries. These include albumins; certain oils such as coconut oil, castor oil and cotton seed oil; hoofmeal; lard; stearin; modified starches; peptones and their derivatives; and plants and parts of plants. The extended timeline is aimed at providing adequate adjustment space for domestic stakeholders.For select sensitive agricultural products, tariff reduction has been applied to ensure a measured level of duty protection continues. These include parts of plants, olives, pyrethrum and oil cakes. Alcoholic beverages have been placed under tariff reduction along with minimum import price-based formulations, consistent with India’s approach in other FTAs.Certain highly sensitive items have been liberalised under Tariff Rate Quotas (TRQs), under which limited quantities are allowed at reduced duties. Products under this category include in-shell almonds, walnuts, pistachios and lentils.Government data shows India maintains a trade surplus of $1.3 billion in agricultural trade with the United States, with exports of $3.4 billion and imports of $2.1 billion in 2024.In an interview with ANI, Union Commerce Minister Piyush Goyal said India’s agricultural products would face lower reciprocal tariffs than competitors, with several items remaining zero tariff."All our agri products now will have a lower reciprocal tariff than our competition at 18%. In addition, I'll read out some items where we reduced reciprocal tariffs to zero. As with tea and coffee, and their extracts, there'll be zero tariff. On spices, there'll be zero tariff. On coconut or coconut oil, there'll be zero tariffs. On vegetable wax, zero tariff," Goyal said.On Saturday, the minister said, "Agricultural products from Indian farmers will be exported to the United States at zero duty. At the same time, no tariff concessions have been granted for agricultural products from US farmers entering the Indian market.""I can state categorically and without any hesitation that India's farmers, MSMEs, artisans, and craftsmen will not suffer any loss. On the contrary, India will benefit from greater access to the US market," he added.