US-India trade deal may restart agricultural trade flows
A new trade deal between the United States and India could give a fresh push to farm trade between the two countries. The early agreement shows signs of easing old barriers that slowed or stopped some key agricultural flows in recent years.
According to a joint statement from the White House, India has agreed to cut or remove tariffs on several US farm products. These changes are part of an initial deal and could open doors that have been closed for a long time.
One product that could see a comeback is dried distillers grains, known as DDG. This feed product is used mostly for livestock. Before that, shipments averaged about 2,100 metric tonnes a year. A 15 percent tariff made the product costly. If that tariff is reduced or removed, trade could restart.
Red sorghum is another crop that may benefit. The US has not exported sorghum to India since 1976. That long gap is tied closely to India’s high tariff, which stands at 50 percent. If that rate comes down, US farmers could see a real chance to sell again.
India is a big consumer of sorghum. The US Department of Agriculture expects India to use about 4.75 million tonnes of sorghum in the 2025 to 2026 marketing year. Even a small share of that market would matter for US growers.
Soybean oil was also named in the agreement. Right now, India charges a 20 percent import tariff on it. US soybean oil exports to India have gone up and down over the years. Still, recent data shows strong growth.
From January to November 2025, the US shipped about 204,000 tonnes of soybean oil to India. That is the highest amount since 1980. In the five years before that, average exports were much lower, around 53,000 tonnes a year. In 2022, shipments reached 133,000 tonnes. The next year, they fell sharply to just 52 tonnes.
These swings show how sensitive trade is to price and policy changes. Lower tariffs could help steady the flow and make the US a more reliable supplier.
The deal also mentioned tree nuts, fruits, wine, and spirits. This includes both fresh and processed products. Trade in these items has been fairly stable in recent years. Even so, any tariff cuts could give them a small lift.
The agreement did not say exactly how much tariffs would change. That leaves some uncertainty. Still, even modest cuts could lead to higher export volumes over time.
On the other side of the trade, lower US tariffs on Indian goods could also shape flows. One key area is organic soybean meal.
The US has agreed to lower tariffs on some Indian exports from 25 percent to 18 percent. This move could support Indian shipments of organic soybean meal to the US. However, trade will still face limits due to existing duties.
In 2021, the US started an antidumping investigation into Indian soybean meal. Many Indian crushers did not respond to requests for data from the US Department of Commerce. Because of that, they were hit with very high antidumping and countervailing duties, more than 266 percent.
Only a few Indian exporters completed the required paperwork. These firms were given much lower duties of 11.83 percent. With the new tariff cuts, those exporters are in a better position to sell into the US market.
Even so, overall volumes are expected to stay modest. High duties on most suppliers still block wider trade.
Demand in the US for organic soybean meal is rising. Argus estimates that feed demand will grow by 7 percent in the 2025 to 2026 marketing year, compared with the year before.
During the 2024 to 2025 marketing year, the US imported about 543,000 tonnes of organic soybean meal. India made up just 7.8 percent of that total. Most of the supply came from other countries.
Recent data also shows weak flows from India. The US did not receive any organic soybean meal from India in December or January, according to Argus figures.
That shows how trade rules can matter as much as demand. Even when buyers want the product, policy barriers can keep trade from happening.
Overall, the new US India trade deal signals a shift in tone. It suggests both sides want to reopen channels and test new paths. Farmers and traders will be watching closely to see if tariff cuts turn into real shipments.
Much will depend on the final terms and how fast changes are put in place. Still, after years of slow or blocked trade, even small steps could make a difference.