India is expected to hold firm on its long-standing red lines in agriculture and dairy as trade negotiations with the United States move into the documentation stage, with senior government officials signalling that sensitive farm sectors will remain shielded from any major market-opening commitments.
New Delhi’s position on excluding sensitive agricultural products and dairy from trade concessions remains unchanged. “What has been the stance remains the stance, a government official was quoted as saying. “The usual stance for sensitive items in agriculture and dairy is likely to stay. The interests of our farmers won’t be compromised,” the official said, underscoring the political and economic sensitivity of these sectors.
BREAKING ⚠️
— Shiv Aroor (@ShivAroor) February 3, 2026
Govt sources on India-US trade deal:
1️⃣ Zero compromise on farmer interests
2️⃣ Agro & Dairy fully protected
3️⃣ 📈 will guide 🛢️purchase
4️⃣ India can buy 🛢️from non-sanctioned places
5️⃣ Deal to unlock 5X trade to $500B over next few yrs pic.twitter.com/Duoq3t1vSd
The remarks come a day after US President Donald Trump announced on his social media platform Truth Social that Washington and New Delhi had reached a trade deal aimed at substantially reducing reciprocal tariffs scheduled to take effect from mid-2025. Trump claimed the agreement would see US tariffs on Indian goods cut to 18 per cent, while duties on American products entering India would drop to zero. Officials in New Delhi, however, clarified that negotiators on both sides are still working through the fine print and formal documentation of the agreement.
The agriculture fault line
Agriculture and dairy employ a significant share of India’s population, with millions of small and marginal farmers dependent on these sectors for livelihoods. Dairy farming in particular is dominated by small, household-level producers rather than large commercial operations. Policymakers and critics of free trade have long argued that opening these markets to imports from countries with heavily subsidised, large-scale farming, such as the US, the European Union, Australia or New Zealand, could undercut domestic producers and trigger rural job losses.
India’s reluctance to grant greater access to its farm sector has been a recurring point of friction in trade talks with Washington. New Delhi has consistently resisted opening politically sensitive segments such as dairy and soybean, even as it selectively offers market access in other trade negotiations. Sources said that the agricultural and dairy sectors, currently protected will continue to be shielded under the India-US framework as well.
Oil, sanctions and strategic autonomy
Trump also asserted that India would stop buying Russian oil as part of the deal, instead sourcing crude from the US and potentially Venezuela. Indian government sources pushed back, reiterating a “people-first” and market-driven approach to energy security.
“We will continue to buy oil from markets giving the best deal and from non-sanctioned entities. Our strategy will be decided by market prices,” a senior source said. India, the world’s third-largest oil importer, has become the second-largest buyer of Russian crude despite US sanctions, importing around 1.5 million barrels per day, more than a third of its total crude imports, according to data from global trade tracker Kpler.
That position is reflected in recent developments in India’s refining sector. Reliance Industries Limited has resumed purchases of discounted Russian crude through non-sanctioned suppliers, routing the barrels to its Jamnagar refinery in Gujarat, according to Bloomberg. India’s largest refiner has reportedly hired Aframax tankers and sourced crude from entities such as RusExport, directing supplies to its 660,000-barrel-per-day unit that caters to domestic demand.
Officials stressed that India would continue to avoid purchases from countries under sanctions, but would resume buying from producers such as Venezuela now that restrictions have been lifted. “We did not buy from Venezuela when sanctions were in place. Now that sanctions are lifted, we will buy it,” the source added.
The $500-billion headline
Trump has claimed that India has committed to buying over $500 billion worth of US goods, spanning energy, technology, agriculture, coal and other sectors, alongside eliminating tariff and non-tariff barriers. Indian officials, however, indicated that the headline figure reflects long-term aircraft purchases and related investments rather than immediate import obligations.
“The commitment to buy US products covers sectors like pharmaceuticals, telecom, defence, petroleum and aircraft. It will be done over the years,” an official earlier told Reuters.
The government maintains that the proposed deal could unlock significant economic value for India. Trade data show that India’s exports to the US rose nearly 16 per cent year-on-year to $85.5 billion during January–November, while imports from the US stood at $46.08 billion over the same period.
For now, however, New Delhi appears determined to keep its most politically sensitive farm sectors off the negotiating table, signalling that while India is open to deeper trade ties with Washington, the livelihoods of its farmers remain non-negotiable.
