US, India trade pact signals new opening for agricultural exports
The pact between the two countries would cut US tariffs on Indian goods from 50% to 18%, and that part of the deal requires India to halt Russian oil purchases.
USA – The United States and India have agreed to a trade deal that US President Donald Trump said would boost exports of American agricultural products to the world’s most populous country, although no specific commodities have been outlined so far.
Trump said the agreement would significantly lower US tariffs on Indian goods, while opening the door for large-scale Indian purchases of US products, including from the agriculture sector.
Posting on Truth Social, Trump said the pact would cut US tariffs on Indian goods from 50% to 18%, and that India has also committed to halting purchases of Russian oil.
According to Trump, India has agreed to buy more than US$500 billion worth of US energy, technology and other products, including agricultural goods.
“India and the United States take a landmark step forward with the India–US Trade Agreement, strengthening bilateral trade and economic cooperation,” India’s Department of Commerce confirmed.
According to India’s statement, the partnership, led by Prime Minister Narendra Modi and President Donald Trump, reflects a shared vision to expand trade, advance technology collaboration, and build resilient supply chains for mutual prosperity across two major democracies.
For US agriculture, the announcement comes after a prolonged period of pressure linked to Trump’s trade war with multiple countries, launched in the spring of 2025.
Retaliatory tariffs imposed by targeted countries have weighed heavily on US farm exports.
The soybean sector has been among the hardest hit, with shipments to China, historically the largest buyer of US soybeans, falling sharply. China is the world’s second most populous country and a key outlet for US oilseeds prior to the trade dispute.
India, however, is not a major importer of whole soybeans. Instead, it is one of the world’s largest buyers of soybean oil, relying primarily on supplies from Brazil and Argentina.
Any shift toward US-origin oil or oilseeds would therefore represent a structural change in India’s import pattern, something analysts say would require clear policy signals from New Delhi.
The timing of the US–India deal is also notable. It follows closely on the heels of an agreement between the European Union and four South American countries in the Mercosur bloc; Brazil, Argentina, Uruguay and Paraguay, aimed at lowering tariffs and expanding trade.
That deal is widely seen as favoring South American meat and soybean producers, although it still requires approval by the European Parliament. Farmers across the EU have protested, arguing that increased imports will undercut domestic production.
Another key constraint for US exporters is India’s strict stance on biotechnology. The United States is the world’s largest producer of genetically modified corn and soybeans, but India has a strict policy prohibiting GM grains and oilseeds for food production.
But with a booming biofuels industry, driven by a 20% ethanol blending target, India has increased its reliance on grain feedstocks, which some analysts have speculated could prompt a surge in corn imports.
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