India to Push for Duty-Free Cotton, Agricultural Exports to US

In what could mark a significant turn in bilateral trade relations, India is expected to seek duty-free access or increased quotas for its cotton and agricultural exports to the United States, according to trade officials familiar with the upcoming dialogue agenda.

The proposed negotiations, part of the broader Indo-US Trade Policy Forum scheduled for later this year, are likely to center on resolving long-standing irritants in agricultural trade. Both countries are working toward a more open, equitable trade environment, and India’s request for tariff relaxations on cotton and other agri-products could become a pivotal part of the discussions.

Cotton First: India’s Strategic Ask

Cotton stands at the heart of India’s agricultural trade push. As the world’s largest cotton producer, India has significant surplus capacity that can serve global markets. Yet, high tariffs and quota restrictions imposed by the U.S. have limited India’s competitive edge in the American textile and raw cotton sector.

The U.S. maintains tariff-rate quotas (TRQs) for cotton imports from several countries, but India does not currently enjoy a dedicated or preferential quota. The result: Indian cotton, despite its scale and quality, is less price-competitive compared to suppliers from nations with free trade agreements (like Mexico or Australia).

“India will seek either full or partial duty exemptions for raw cotton and certain processed varieties under a quota system,” said a senior Indian trade official. “This will benefit lakhs of Indian farmers and textile producers, while ensuring the U.S. gains access to affordable raw material.”

Beyond Cotton: Expanding Agri Access

The proposed negotiation isn’t limited to cotton alone. India is likely to push for similar access on other agricultural exports, such as:

• Basmati rice

• Spices (especially turmeric, ginger, cumin)

• Organic produce

• Sugar and jaggery

• Horticulture items like mangoes, pomegranates, and bananas

Many of these items face high import duties in the U.S. or non-tariff barriers related to phytosanitary standards. Indian exporters say that even a small quota of duty-free access could significantly boost their earnings, especially for premium-quality agri products.

The recent success of the “mango diplomacy” — wherein Indian Alphonso and Kesar mangoes were allowed back into the U.S. market after negotiations — is seen as a template to replicate and scale.

Why the Timing Matters

The current push comes amid a broader recalibration of global trade dynamics, driven by shifting supply chains, geopolitical tensions, and a growing emphasis on “trusted partners.”

For India, this is an opportunity to capitalize on its rising geopolitical relevance and domestic agricultural surplus. For the U.S., it is a chance to diversify agri imports, tame inflation, and strengthen ties with a key ally in the Indo-Pacific.

The Biden administration is under increasing pressure from domestic industries to bring down input costs, and cotton is a major component in apparel and industrial manufacturing. Indian cotton, known for its long staple fiber, could help fill the gap if made more competitive through duty relaxations.

A Balancing Act for the U.S.

However, the issue is not without complications. The U.S. has strong farm and textile lobbies that may resist increased imports without reciprocal access or safeguards. Domestic producers fear that duty-free Indian agri products could undercut prices and hurt local farmers.

Moreover, the U.S. might demand concessions from India in return, such as:

• Greater access to India’s dairy and poultry market

• Relaxation of India's export bans or stockholding limits

• Adherence to science-based sanitary regulations

• Faster approvals for biotech and genetically modified crops

“Duty-free access is never given in isolation. If it’s on the table, Washington will ask for significant regulatory openings in return,” noted a Washington-based trade policy analyst.

GSP Restoration Still a Sticking Point

India continues to push for the restoration of the Generalized System of Preferences (GSP) benefits that the U.S. withdrew in 2019, affecting around $6 billion worth of Indian exports. While GSP restoration is not directly tied to the cotton/agri debate, trade officials acknowledge that it forms part of the larger negotiation matrix.

Duty-free access for select agri commodities could be positioned as a limited, sector-specific GSP-style arrangement — a potential compromise if full restoration is delayed due to U.S. Congressional bottlenecks.

Domestic Impact in India

Indian cotton and agri exporters have welcomed the development. If even a modest quota is granted under preferential terms, it could:

• Boost rural incomes

• Enhance global competitiveness for Indian textiles

• Improve price realization for small farmers

• Spur investment in warehousing, packaging, and cold-chain infrastructure

“This will bring predictability and price stability,” said an executive with the Cotton Corporation of India. “It also gives us leverage to invest in higher quality standards aligned with U.S. phytosanitary norms.”

Trade Ties with Momentum

The two countries have made visible progress in other trade fronts recently:

• Tariff cuts on steel, aluminum, and certain electronics

• Agreement on dispute resolution at the WTO

• Collaboration on semiconductors and clean energy tech

• Launch of joint agriculture working groups to streamline food safety regulations

In this context, a quota-based access deal for agri goods could serve as another symbolic and material boost to the relationship.

 A Limited but Strategic Win?

While a full-fledged free trade agreement (FTA) between India and the U.S. remains elusive, strategic sectoral negotiations like these may form the building blocks of a deeper economic partnership.

Duty-free quotas for cotton and select agri items will not resolve all trade disputes — but they can unlock significant goodwill, offer concrete gains to exporters, and set the stage for broader reforms on both sides.

As the trade talks gear up, negotiators will need to navigate protectionist pressures, balance competing interests, and align on long-term goals. Whether this culminates in a landmark deal or a cautious step forward remains to be seen — but the fact that farm goods are on the table is a signal that both nations are willing to sow the seeds of deeper cooperation.