In the wake of the landmark trade deal announced by President Trump on February 2, 2026, the status of agriculture and dairy has emerged as a major point of confusion. While US officials are declaring a victory for American farmers, Indian government sources have been quick to reassure domestic producers that their “red lines” remain intact.
As of February 3, 2026, here is the breakdown of why these sectors might be excluded—or at least strictly limited—within the new framework:
1. The “Red Line” Strategy
Multiple Indian government sources and media reports indicate that India is maintaining its traditional stance of excluding sensitive farm and dairy products from the core of the deal.
- Small Farmer Protection: India has consistently argued that opening these sectors would devastate the livelihoods of millions of small-scale, subsistence farmers who cannot compete with heavily subsidized US imports.
- Cultural Sensitivity: Dairy remains a non-negotiable area due to religious and cultural concerns over US cattle-feed practices (such as the use of blood meal), which conflict with Indian dietary norms.
- Precedent: This strategy mirrors India’s approach in other recent trade agreements, such as the India-EU FTA (sealed just days ago on January 27, 2026), which explicitly kept dairy and staple crops like rice and wheat protected.
2. Contradictory Official Statements
The confusion stems from the sharply different narratives being pushed by Washington and New Delhi:
| Source | Official Stance (Feb 2–3, 2026) |
| Donald Trump | Claimed India committed to buying over $500 billion in US goods, explicitly including “agriculture.” |
| Brooke Rollins (US Ag Sec) | Called the deal an “America First victory” that will pump cash into rural America by opening India’s “massive market.” |
| Piyush Goyal (Indian Commerce Min) | Framed the deal around “Make in India,” focusing on MSMEs and entrepreneurs rather than broad farm imports. |
| Indian Govt Sources | Told Reuters and Moneycontrol that any agricultural access would be “narrow, selective, and carefully hedged.” |
3. What Might Actually Be Included?
While a total “floodgate” opening is unlikely, analysts expect “tranche-based” concessions in less sensitive areas to satisfy US demands:
- Processing By-Products: Items like soymeal, ethanol, and distillers grains (used for animal feed) are seen as less politically explosive than staple food-grade grains.
- High-End Niche Goods: Limited quotas for premium items like apples, almonds, or specific walnuts might be granted, similar to the 20,000-tonne apple quota recently given to the EU.
- The “Zero Barrier” Claim: While Trump claimed India would reduce all barriers to zero, Indian officials have not confirmed this, suggesting that “zero” might only apply to specific technology or energy lines rather than the entire farm sector.
4. Political Flashpoints
The lack of clarity has already turned the deal into a political battleground:
- Opposition Protests: The Congress party and various farmer unions have accused the government of a “complete surrender” that could turn “Make in India” into “Sell India.”
- Parliamentary Scrutiny: Opposition leaders staged a walkout in the Rajya Sabha today, demanding the full text of the agreement be laid on the table to verify that farm protections haven’t been traded for lower US tariffs.
Conclusion: The “Elephant in the Room”
Until the formal product lists and “presidential proclamations” are published in the coming weeks, agriculture and dairy remain the most volatile parts of the deal. The likely outcome is a “hybrid” model: India will likely keep its core “red lines” (dairy, rice, wheat) fully protected while offering the US increased access in specific energy and high-tech sectors to reach that $500 billion commitment.
