What happened as US fact sheet flagged tariff cuts on certain pulses under India-US trade deal
India is expected to reduce tariffs on a range of US food and agricultural products, including “certain pulses,” under the recently announced interim trade agreement between New Delhi and Washington, according to a fact sheet released by the White House.
The US document said India will “eliminate or reduce tariffs” on all US industrial goods and on a wide set of agricultural products such as dried distillers’ grains (DDGs), red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine and spirits, among others.
The reference to pulses has drawn attention because earlier Indian government communications on the interim agreement did not explicitly mention tariff concessions on pulses, which are politically and economically sensitive in India.
India and the United States on Saturday announced an Interim Agreement on reciprocal and mutually beneficial trade aimed at expanding market access and strengthening supply chains between the two economies.
Why it matters as pulses and farm trade remain politically sensitive in India
Agricultural trade is one of the most sensitive areas in India’s trade policy, given the sector’s role in rural livelihoods, food security and inflation management. Pulses, in particular, are a staple in Indian diets and are closely monitored by policymakers because of their impact on retail prices and farm incomes.
Any suggestion of lower import tariffs on pulses can trigger debate over farmer protection, price stability and self-sufficiency. For markets and policy watchers, the difference in emphasis between the US fact sheet and Indian statements highlights the complexity of trade negotiations, where language and scope can vary across jurisdictions.
For bilateral ties, however, the interim deal signals a willingness on both sides to move forward on trade facilitation after years of stop-start negotiations. The agreement is positioned as a step toward more resilient supply chains and deeper economic cooperation.
What we know so far from official statements and data
Several confirmed points emerge from available disclosures:
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The White House fact sheet lists “certain pulses” among products where India may cut or eliminate tariffs.
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India’s earlier official note on the deal did not specifically mention pulses.
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India’s pulses import bill rose 46% to $5.48 billion in FY2024-25 from $3.75 billion a year earlier, according to official data.
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Of this, the US accounted for about $89.65 million, a relatively small share.
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The interim deal includes additional market access commitments and supply-chain cooperation.
These numbers suggest that while pulses are important for India’s food system, the US is not currently a dominant supplier compared to other exporting nations.
What remains unclear as both sides frame the agreement differently
Key aspects of the arrangement are still not fully clear.
It is not yet clear:
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Which categories fall under “certain pulses”
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The exact tariff lines and rate reductions involved
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The implementation timeline for any concessions
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Whether quotas or safeguards will apply
It is also unclear how India will reconcile the US description with its domestic messaging on protecting sensitive crops. Trade agreements often involve phased or conditional commitments, and details are sometimes worked out after headline announcements.
Further clarification from Indian authorities is awaited on the precise scope of tariff changes.
How the deal could affect agricultural trade flows and segments
If tariffs are reduced on selected US agricultural products, trade flows could gradually adjust depending on price competitiveness, logistics and domestic demand.
According to the US fact sheet, products that could benefit include:
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Tree nuts
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Cotton
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Soybean oil
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DDGs and sorghum
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Fresh and processed fruit
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Certain pulses
However, tariff reductions alone do not guarantee higher imports. Factors such as global prices, currency movements, phytosanitary norms and domestic procurement policies also shape trade volumes.
For Indian farmers, the key concern is whether cheaper imports could pressure domestic prices. For consumers, lower tariffs can sometimes help moderate food inflation, though the pass-through is not always direct.
Broader context shows India balancing openness and protection in farm trade
India has historically taken a calibrated approach to agricultural trade, opening some segments while maintaining high protection in others. Sensitive commodities such as rice, wheat, sugar and certain staples are often shielded to protect farmer incomes and ensure food security.
The interim nature of the current agreement suggests it is not a full-scale free trade pact but a targeted arrangement focused on specific sectors and mutual interests.
The government has repeatedly emphasized that trade policy in agriculture must balance farmer welfare with consumer needs and diplomatic objectives. This balancing act becomes more delicate in an election-sensitive and inflation-aware environment.
What officials and experts are saying about farmer protection
Union Commerce Minister Piyush Goyal said earlier that Indian farmers would remain protected under the agreement and that Indian agricultural exports to the US would benefit from zero duty.
“Agricultural products from Indian farmers will be exported to the United States at zero duty. At the same time, no tariff concessions have been granted for agricultural products from US farmers entering the Indian market,” he said at a February 7 press conference.
He added that products such as spices, tea, coffee, coconut, cashew, mango, banana, guava, pineapple and processed items like jams and juices would face zero reciprocal tariffs in the US. He also said sensitive commodities including rice, wheat, sugar, millets and pulses remain fully protected.
Manoj Mishra, Partner at Grant Thornton Bharat, said major crops, food grains, fruits and dairy remain protected and that the market has not been opened to genetically modified crops. He added that while India exports more agricultural products to the US than it imports, US exports of tree nuts, cotton and soybean oil to India could grow under the pact.
According to Mishra, the agreement supports a stable and balanced agri-trade relationship without placing undue pressure on Indian farmers.
What it means for investors, traders and agribusiness stakeholders
For investors and agribusiness players, the deal is more relevant as a policy signal than an immediate volume driver.
Key implications include:
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Potential opportunities for firms linked to edible oils, nuts and feed products
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Signals of gradual trade normalization between India and the US
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Continued policy caution in highly sensitive farm segments
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Possible impact on food inflation dynamics over time
For equity markets, the impact is likely to be sector-specific and gradual rather than broad-based. Companies exposed to agri imports, processing or export-oriented food segments may track developments more closely.
What to watch next as details and implementation emerge
Market participants and policy watchers will be looking for:
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Detailed tariff schedules and product lists
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Clarifications from India on pulses and other sensitive items
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Implementation timelines and safeguard clauses
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Reaction from farmer groups and industry bodies
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Any follow-on negotiations toward a larger trade pact
If the two sides align their public descriptions and provide clarity, uncertainty around pulses and other items may ease. Until then, the interim deal appears to be a step toward closer trade ties, but with careful guardrails around politically sensitive farm sectors.
