New Delhi: The India-US trade deal has largely protected the interests of Indian growers by lowering tariffs on several items such as coffee and shrimps but not allowing market access to US grown soybean, corn and dairy products into India.
However, imports of distillers dried grains with solubles (DDGS), a by-product of ethanol manufacturing that is used as an animal feed, can hurt farm gate prices for corn and soy growers in India as well as the profitability of ethanol manufacturers.
An India-US joint statement on the interim trade agreement released early Saturday India time noted that India will eliminate or reduce tariffs on a wide range of “U.S. food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products”.
Further, India also agreed “to address long-standing non-tariff barriers to the trade in U.S. food and agricultural products.” Non-tariff barriers can include specific quotas or quantities of a particular commodity to be imported and product and safety standards such as the presence of genetically modified organisms (GMO).
“We have fully protected the interests of farmers and the dairy sector,” commerce minister Piyush Goyal said at a press briefing Saturday afternoon. The minister added that Indian growers will be able to export several items like spices, tea, coffee, copra, coconut oil, and several fruits and vegetables at zero tariff.
India has not allowed import of farm products like meat, poultry, dairy items, soybean, maize, cereals like rice and wheat, sugar, and millets, the minister said.
Here’s how different farm sectors are likely to be impacted by the trade deal:
Import of DDGS, input into animal feed
While India has maintained that the trade agreement protects the interests of its farmers, the agriculture sector may see indirect impact, particularly from import of DDGS. The US ethanol industry, the largest manufacturer globally, mostly uses GM corn or maize to manufacture ethanol. DDGS is the leftover of this process—a protein-rich material used as cattle, poultry and fish feed. Ethanol manufacturers in India also produce and sell DDGS to local feed manufacturers but this is made from non-GM corn and rice.
If India allows duty free imports of DDGS, it will impact the profitability of local ethanol manufacturers who are struggling with excess capacity. Also, this may lower the price of maize for India’s domestic farmers (maize is a critical input in ethanol production). Further, in the animal feed category, as DDGS competes with soy meal, also known as de-oiled soy cake (a protein-rich leftover after the oil is extracted from soybeans), cheap imported DDGS may impact the price for Indian soy farmers.
However, it remains unclear if imported DDGS will be cheaper than what is manufactured domestically. The landed price of imported DDGS will be around ₹24-25 per kg which is slightly expensive than domestically produced DDGS, said an ethanol manufacturer who did not want to be named. “But DDGS prices are quite volatile and nothing can be said for certain.”
An industry body welcomed the government move. “From the ethanol and distillery sector’s perspective, it is important that such measures remain aligned with India’s E20 blending roadmap, feed security considerations, and the broader objective of strengthening domestic value chains,” said Vijendra Singh, President, All India Distillers’ Association (AIDA), adding operational details of the deal are awaited.
“We are confident that India’s indigenous ethanol and distillery industry is highly cost-competitive and technologically capable of meeting domestic demand [efficiently],” he added
The import of soybean oil is another unknown. India currently imposes a duty of 16.5% on crude soy oil imports and nearly 36% on refined soy oil imports. But most of the soy oil is imported from Brazil and Argentina which are cheaper than USA. It remains to be seen by how much duties are lowered for imports from USA.
Impact on fruits and vegetables
The interim trade agreement raised the Minimum Import Price (MIP) on apples imported from the US from ₹50 to ₹80 per kg. Although the import duty on US apples has been reduced from 50% to 25%, the higher MIP is expected to push up prices. As a result, the landed price of Washington apples is likely to increase to around ₹100 per kg, compared to about ₹75 per kg earlier. Minister Goyal also added that like earlier, there will be quota restrictions on imports.
Farmer unions and orchard owners, especially from apple-growing states such as Himachal Pradesh and Jammu and Kashmir, said the trade deal is a mixed bag for them. “We are not fully satisfied with the deal. However, it offers some relief to apple growers as the import duty has not been reduced to zero. It would have been even better if the government had retained the existing import duty,” said Harish Chauhan, convener of the Sanyukt Kisan Manch, an umbrella organisation of farmer groups.
An exporter organisation said zero tariff fruit exports to the US was significant. “Bringing tariffs down would significantly boost India’s fruits and vegetables exports to the United States, as it would make Indian produce more price-competitive in the American market. This could encourage farmers to expand production and strengthen India’s overall agri-export presence in the US,” said Ekram Husain, vice-president of the VAFA Fresh Vegetables and Fruits Exporters Association (Maharashtra).
Boost for seafood exports
The reduction of duty on seafood is expected to boost its exports to the US, India’s largest market for such exports. Lower tariffs would also improve price realization, industry representatives noted. In turn, they added, the policy move could encourage higher production, greater investment in processing capacity, and stronger income support for aquaculture farmers.
The US is the largest market for Indian seafood exports. India exported marine products worth $7.39 billion in 2024-25, of which $2.68 billion, or about 36%, went to the US, according to the Marine Products Export Development Authority. Frozen shrimp accounted for a major share of such shipments.
This year, the quantum of exports had dropped by about 6.3% (in value terms) and by close to 15% (in quantity terms) during the period from April to November from the year-ago period on account of the imposition of 50% tariffs by the Trump administration from August 2025, according to exporters.
Including a countervailing and anti-dumping duty of 9.7%, seafood exports from India to the US were subject to a 59.7% tariff. This put India at a disadvantage as compared to its competitor Ecuador, which was subjected to only a 19% duty. Also, initially, before the imposition of duty in April last year, Indian exporters were subjected to a zero tariff and were subjected to around 8% duty, including countervailing and anti-dumping duty.
“The announcement has come at the right time, and we hope that whatever the market lost will be regained in coming months,” said KN Raghavan, secretary-general of the Seafood Exporters Association of India (SEAI), a Kochi-based lobby group for such exporters.
Domestic price of nuts to ease
According to Nuts and Dry Fruits Council (India), the India–US trade deal is expected to structurally strengthen the flow of nuts and dry fruits into the Indian market. With duty barriers easing, importers will be able to move from opportunistic buying to planned, year-round sourcing. This will improve availability, reduce volatility in supply, and encourage greater usage by food processors, bakeries, and packaged snack brands.
The council is of the view that a reduction in import duty is likely to translate into softer retail prices across major nut categories, particularly almonds and walnuts, which currently carry a significant duty component in their landed cost.
Imports from the US are led overwhelmingly by almonds, followed by walnuts, with growing inflows of pistachios, cranberries and blueberries used across retail, bakery and health food segments.
When asked if zero duty would impact Indian growers, Gunjan Vijay Jain, President, Nuts and Dry Fruits Council (India) said that zero duty may create some short-term pricing pressure in overlapping categories where India has domestic production, particularly walnuts and cashews.
“However, imports largely serve demand that domestic supply cannot fully meet in terms of volume, consistency, and grading. In categories such as almonds and pistachios, domestic cultivation remains limited, meaning imports do not directly displace farmers. Over time, wider availability may actually expand overall market size rather than reduce domestic sales,” Jain added.