India and the EU have reached consensus on almost half of the topics to be covered by a trade deal they hope to seal this year and have agreed that the pact will not cover some “sensitive” farming products such as dairy, according to people with knowledge of the talks.

The people said negotiators had agreed eight out of roughly 20 deal “chapters”, each covering topics such as rules of origin or intellectual property rights, after the EU in February stepped up efforts to bolster economic ties with the world’s fifth-largest economy.

The progress will fuel hopes that a deal between New Delhi and Brussels can help offset some of the impact on both sides’ trade from the tariffs imposed or threatened by US President Donald Trump, while the exclusion of dairy products will come as a big relief to Indian farmers and milk processors.