When we think of trade wars or global market fights, we usually imagine big industries like tech, oil, or defense. But here’s something maybe you haven’t thought about. Dairy products have become a quiet battlefield between two major economies India and the United States. And while it might seem like a small issue, it actually says a lot about how India is protecting its own people, traditions, and economy.
For years, the US has been trying to sell its dairy products especially cheese, milk powder, and whey protein - in Indian markets. But India has consistently denied their request. This has sparked debates at the World Trade Organization (WTO).
But this isn’t just a matter of being stubborn. India’s dairy industry is huge it supports over 80 million families, many of them small or landless farmers. Letting in foreign dairy products, especially cheaper ones from the US, could seriously hurt their incomes.
Religious & Cultural Reasons
One of the biggest reasons India has opposed is pretty simple cow protection and vegetarian beliefs. In India, cows are considered sacred by many, especially Hindus. So, when US dairy products particularly cheese — are made using animal rennet (an enzyme from the stomach lining of calves), it creates a major problem.
Even if it’s just one ingredient in the production process, it goes against the beliefs of millions. India has asked US suppliers to guarantee that their products are free from animal-derived rennet, but American producers often can’t (or won’t) provide that proof.
For a country where food choices are deeply linked to tradition and religion, that’s a dealbreaker.
Safety & Health Concerns - What's in Your Milk?
In addition, hormones and medicines are a problem. Recombinant bovine growth hormone, or rBGH, is a substance used by many dairy farms in the United States to increase milk production from cows. These cows may have higher levels of some hormones in their milk, according to studies, and there may be long-term health consequences.
India doesn’t allow rBGH for its own dairy farmers, so it makes sense that it doesn’t want to import products made with it either. The Food Safety and Standards Authority of India (FSSAI) has been firm about keeping these kinds of products out.
India won’t let its own farmers use something; it’s not going to import it either.
Protecting the Backbone: Small Farmers
Imagine you’re a dairy farmer in a village with two cows. Every day, you sell milk to your local cooperative, which then processes and sells it in nearby towns. This is the reality for millions of Indian farmers. Dairy isn’t just a business it’s how people survive, educate their kids, and put food on the table.
Now imagine cheap US milk powder or cheese flooding the market, sold at prices you just can’t match because the US government supports its dairy farms with heavy subsidies. The local cooperative could collapse. That’s not just economic disruption its a crisis.
So, by saying no to US dairy imports, India is protecting its rural economy and ensuring farmers can stay in business.
Trade Strategy
India isn’t against international trade. But it’s smart about where and when to open its markets. In trade talks (especially with the US and in forums like the WTO), dairy is one of the areas where India draws a red line.
Why? Because giving access to US dairy offers very little in return. It’s not like India will suddenly get to export more software, medicines, or textiles just because it lets in some cheese.
So, instead of giving up a crucial part of its economy for short-term gains, India holds its ground and uses dairy as a bargaining chip in bigger negotiations.
What the US Says
US isn’t thrilled about this. American producers argue that:
- India is violating free trade principles.
- India’s rules on rennet and hormones aren’t scientific.
- The barriers are basically disguised protectionism.
They’ve even taken the issue to the WTO. But under international rules, countries are allowed to make exceptions for public health, safety, and cultural reasons — and so far, India has managed to defend its position.
Why This Works in India’s Favor?
There’s actually a lot India gains by keeping US dairy products out.
1. Increasing Domestic Demand
Indian farmers and cooperatives benefit from a steady market since there is no competition from elsewhere. Local milk and dairy products are purchased by consumers, keeping the money in the local economy.
2. Enhancing Our Own Mechanisms
India is making investments in cold chains, cattle breeds, and milk quality as well as modern dairy infrastructure. Initiatives such as the Rashtriya Gokul Mission are working to increase native breed output.
3. Safeguarding Small and Street Sellers
India's dairy market is largely unorganized. Consider milkmen, neighborhood merchants, and tiny stores that offer curd or paneer.
4. Food Security
In uncertain global times (COVID-19, wars, supply chain issues), having a strong, local food system is a huge advantage. If the world’s supply lines crash, India won’t be scrambling for basic nutrition like milk.
Will India Ever Allow?
There are ideas floating around that India could allow limited imports — things like:
- Whey protein for fitness and food processing
- Specialty cheeses not made in India
- Imports from certified, rennet-free producers
But any change will probably come slowly, and only if India gets something valuable in return, like better market access for its own goods and services.
Is India self-sufficient in dairy products?
- The Global Dairy Products Market is estimated to be valued at USD 140.50 Bn in 2025 and is expected to reach USD 247.26 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 8.4% from 2025 to 2032.
- In FY 2022–23, India produced approximately 230.6 million tonnes of milk. Per‑capita availability was nearly 459 g/day.
- India accounts for over 24% of global milk production — roughly 1 in every 4 liters produced globally comes from India.
- According to statistics on export data for dairy products, India exported 63,738.47 MT of dairy products in 2023–2024, valued at USD 272.64 million.
- India is largely self‑sufficient in dairy production — in fact it's the world’s largest milk producer.
Final Thoughts
At first, it might seem like India’s ban on US dairy is a simple trade issue. But really, it’s about:
- Respecting religious and ethical beliefs
- Safeguarding public health
- Protecting millions of small farmers
- Strengthening the rural economy
- Playing smart in global negotiations
In a world where economic power often decides the rules, India is saying we will open the door when it makes sense for our people not just because someone bigger tells us to.
For a developing country balancing tradition, progress and fairness, that’s a pretty bold and smart move
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