While the opening of the Indian market to U.S. dairy is a significant trade victory, the access will be strictly limited and carefully managed. India has agreed to import only “certain dairy products” and has explicitly imposed safeguards to protect its massive domestic dairy sector. Notably, the agreement will not include liquid milk, a critical exclusion for the highly sensitive domestic producer base. This calculated concession addresses the historical “red line” concerns of the Indian government, which has repeatedly promised its farmers that their interests would not be compromised in any comprehensive trade deal.

In addition to dairy, the trade pact provides clear pathways for U.S. grain imports. India plans to allow the import of both soyabean and corn. The imported corn is strategically earmarked for use in the nation’s growing ethanol production sector, providing a strategic benefit beyond food consumption. For soyabean, India will specifically purchase non-genetically modified product directly from the U.S. industry, though the U.S. is not heavily pressing this point due to current strong Chinese demand absorbing much of the supply.

A crucial element being finalized by negotiators is the reciprocal tariff rate, which will apply to various traded goods. Two primary options are under discussion: a range between 12 and 15 percent or a higher band of 15 to 19 percent. The Indian side is actively pushing for the lower rate, which would position India’s tariff structure below the European Union’s 15 percent deal with the U.S. Regardless of the final outcome, the tariff will be significantly better than the 19-20 percent rate currently applicable to several Asian countries that previously entered similar deals.