US President Donald Trump announced a trade deal with India that slashes US tariffs on Indian goods from 50% to 18% in exchange for India halting Russian oil purchases and lowering trade barriers. Trump announced the deal on social media on 2 Feb, following a call with the Indian Prime Minister Narendra Modi, noting that India would now buy oil from the US and potentially Venezuela. The US Secretary for Agriculture Brooke Rollins followed up the announcement with a post on X that said 'good news for American farmers'. The two announcements have raised several questions. If India is halting Russian oil purchase, then either India's Minister for External Affairs Subrahmanyam Jaishankar or Minister of Commerce and Industry Piyush Goyal should know. For now both ministers are passing the buck to each other, which conveys that not only India’s US policy, but also India’s Russian policy is in disarray. The announcements have also led to speculation about India's agriculture, fisheries, poultry and dairy sectors. US produce flooding Indian markets will destroy the livelihoods of over a 100M small and marginal farmers, fishermen, poultry and dairy owners. On 7 Feb, the US and India reached a framework for an Interim Agreement which says India will buy goods worth $500B in 5 years. Considering India’s budget for 2026–27 is USD 583B, the import goal from the US seems impossible unless India allows unrestricted imports, which will have a devastating impact on India’s economy. The Interim Agreement will be signed mid-March, leading to a ‘mutually beneficial Bilateral Trade Agreement’. While some agricultural products are listed—red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, and wine and spirits—the term ‘additional products’ is also mentioned. It is not clear if the catch all phrase will be used to import wheat, corn, cotton, dairy, and poultry products. Panjab being primarily an agricultural state will be hugely affected by this deal. Panjab’s Leader of Opposition Partap Singh Bajwa said, 'This is not free trade, this is a structured disadvantage for Indian agriculture.’ While Panjab’s Bharatiya Janata Party chief Sunil Jhakkar said the India-US trade agreement is in India’s interest and would boost the state’s industrial development and create new employment opportunities for the youth (earlier coverage).
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