The limited scope of this initial trade package is a pragmatic approach to build confidence and address immediate concerns. India was expected to offer tariff concessions on approximately 50 specific US products, while the United States might reciprocate by reducing duties on certain Indian exports, such as textiles and handicrafts. This focused exchange aims to create positive momentum without getting bogged down in the more politically sensitive issues surrounding market access for agricultural and dairy products.

The exclusion of dairy and agriculture from this preliminary deal highlights India’s protective stance over its vast farming sector, which supports millions of livelihoods. The US, conversely, has consistently sought greater access to India’s burgeoning market for its dairy and agricultural exports. By deferring these complex discussions, both countries can capitalize on mutual trade benefits in less sensitive areas, paving the way for deeper, albeit slower, engagement on more contentious issues down the line.

This “mini trade deal” is widely seen as a foundational step towards potentially negotiating a much larger Free Trade Agreement (FTA) in the future. Resolving smaller trade disputes and fostering a spirit of cooperation through limited concessions can lay the groundwork for more ambitious pacts. Such an approach aims to streamline trade flows and reduce non-tariff barriers, benefiting various industries while strategically managing high-stake sectors like dairy economics.