Trump says US-India deal near, except on farms and dairy. Here's what’s stopping it

US President Donald Trump said the United States is “close to making a deal with India,” signaling progress on a long-delayed trade agreement. According to Trump, New Delhi has offered substantial market access for US goods in nearly all areas except agriculture and dairy — two industries India has consistently protected.

The deal under discussion is a limited “mini trade deal,” with broader negotiations possibly on the horizon. US officials have confirmed Trump’s comments, indicating alignment on key aspects, though core differences remain unresolved.

Why farm and dairy

India’s refusal to open its agriculture and dairy markets stems from deep-rooted concerns. These sectors employ a significant share of India’s population, many of whom rely on small landholdings and modest dairy production for survival. Policymakers in New Delhi worry that US imports, produced at industrial scale, would drive down prices and destabilize rural livelihoods.

Agriculture and dairy also touch on food security and political sensitivities. India supports its farmers with subsidies and minimum support prices, aiming to keep food affordable and rural incomes stable. Opening the sector to foreign competition could disrupt this model and trigger political fallout.

Cultural and regulatory issues add further complexity. Indian restrictions on genetically modified crops and concerns over animal-based feed in US dairy production pose significant barriers to American exports.

Despite repeated attempts, both sides have hit a stalemate over these issues. The US continues to seek broader access, but India has made clear that its red lines on agriculture and dairy remain intact.