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US-India Trade Deal Reshapes Agricultural Trade

  //food-wine.news-articles.net/content/2026/02/16 .. ndia-trade-deal-reshapes-agricultural-trade.html
  Published in Food and Wine on Monday, February 16th 2026 at 0:03 GMT by moneycontrol.com
      Locales: UNITED STATES, INDIA

Washington D.C. - February 16th, 2026 - A landmark trade agreement between the United States and India is poised to reshape agricultural trade dynamics and bolster the economic partnership between the two nations. While details are still emerging, a recently released fact sheet from the US Trade Representative (USTR) reveals a focus on key agricultural market access improvements, particularly regarding pulses and dairy, alongside broader commitments to trade facilitation. This agreement isn't merely a tariff reduction exercise; it represents a concerted effort to address long-standing trade disputes and build a more predictable and stable environment for businesses on both sides of the globe.

The immediate impact of the deal centers around agricultural commodities. India's commitment to lower tariffs on certain pulses is being hailed as a significant win for American farmers. For years, US pulse growers - producers of lentils, chickpeas, and peas - have faced substantial barriers to entry in the Indian market due to high import duties. These tariffs, often exceeding 50% in some cases, effectively priced US pulses out of contention, limiting export potential. While the specific pulses benefiting from the reduced tariffs haven't been fully detailed, industry analysts expect a substantial increase in US exports once the implementation phase begins. The USTR fact sheet underscores that the tariff reductions are not blanket across all pulse varieties, suggesting a targeted approach designed to address specific areas of contention and maximize impact. This suggests potential quotas or phased reductions might be involved.

Beyond pulses, the agreement marks a breakthrough in the contentious issue of US dairy access to India. A long-standing point of friction, India previously maintained significant restrictions on imports of US dairy products, citing concerns about animal health and biosecurity. The new agreement grants increased market access, resolving a dispute that had simmered for years and even led to challenges at the World Trade Organization (WTO). The specific provisions relating to dairy access are expected to include streamlined inspection processes, harmonization of sanitary and phytosanitary standards, and potentially, reduced tariffs on certain dairy products like cheese, butter, and skim milk powder. This represents a major victory for the US dairy industry, opening a potentially vast new market for American producers. Representatives from the US Dairy Export Council have already expressed optimism, predicting a substantial increase in dairy exports to India within the next three to five years.

However, the deal's impact extends beyond just agriculture. A crucial component of the agreement is India's pledge to improve trade facilitation processes. For US businesses operating in India, navigating complex regulatory hurdles and bureaucratic delays has been a persistent challenge. The agreement promises increased transparency in regulations, simplified customs procedures, and a more efficient dispute resolution mechanism. Experts believe these improvements will significantly reduce the cost of doing business in India and encourage greater US investment. This commitment to trade facilitation aligns with ongoing global efforts to streamline international commerce and reduce non-tariff barriers to trade. It's a move welcomed by the US Chamber of Commerce, which has consistently advocated for a level playing field for American companies.

The broader geopolitical context also plays a role. This trade agreement strengthens the strategic partnership between the US and India, particularly as both countries seek to diversify supply chains and reduce reliance on single-source dependencies. It comes at a time of increased global economic uncertainty and growing concerns about protectionism. Analysts point to the deal as a signal of commitment to free and fair trade, and a counterweight to rising trade tensions elsewhere. The agreement could also pave the way for future negotiations on a broader free trade agreement, encompassing a wider range of goods and services.

The long-term success of this agreement will depend on effective implementation and ongoing dialogue between the two countries. Monitoring compliance with the commitments outlined in the fact sheet will be crucial, as will addressing any unforeseen challenges that may arise. However, the initial signs are promising, suggesting a significant step forward in strengthening the economic relationship between the United States and India. The focus on pulses, dairy, and trade facilitation signals a pragmatic approach, addressing immediate concerns while laying the groundwork for a more robust and sustainable trade partnership in the years to come.