What is non-veg milk — and why it’s the bone of contention in the India–US trade deal | Explained
An important discussion between India and the United States, aimed at finalising and strengthening a bilateral trade deal to $500 billion by 2030, has reached a stalemate over dairy and agriculture. New Delhi has refused to allow American dairy imports, citing cultural concerns over “non-veg milk.”
What does India say?
India has clearly called it a “non-negotiable red line” to safeguard its citizens and is seeking a stringent certification that assures imported milk comes from cows not fed animal-based products such as meat or blood.
India has strongly declined to yield on dairy. The industry nourishes over 1.4 billion individuals, and provides jobs to more than 80 million, mostly small-scale farmers. “There is no question of conceding on dairy. That’s a red line,” India Today TV quoted a top government source in July as saying.
United States’ response
Washington, DC, has called India’s stance on not permitting dairy and agriculture an “unnecessary trade barrier,” India Today reported. It raised the matter at the World Trade Organisation (WTO). According to the Times of India, the US hinted that India’s updated dairy certification, implemented in November 2024, does not state such concerns.
India’s insistence stems from the cultural and food habits of Indians, especially within the sizable vegetarian community, who consider dairy sourced from cows fed animal by-products as incompatible with their religious convictions.
“Cows are still allowed to eat feed that can include parts of pigs, fish, chicken, horses, even cats or dogs… And cattle can continue to consume pig and horse blood for protein, as well as tallow, a hard fat from rendered cattle parts, as a fattening source,” stated a report in an American daily, The Seattle Times, under the headline, “Cattle feed is often a sum of animal parts.”
Ajay Srivastava of Global Trade Research Institute (GTRI), a New Delhi-based think tank, said, “Imagine eating butter made from the milk of a cow that was fed meat and blood from another cow. India may never allow that.” India, as the top milk producer worldwide, is dedicated to protecting its millions of small dairy farmers.
“The government needs to make sure we’re not hit by cheap imports from other countries. If that happens, the whole industry will suffer, and so will farmers like us,” Reuters quoted Mahesh Sakunde, a farmer from Maharashtra.
India levies significant taxes on dairy imports: 30% on cheese, 40% on butter and 60% on milk powder. Considering these, it is not profitable to import these products from countries like New Zealand and Australia, which usually offer cheaper prices.
What if India opens its dairy sector to American imports?
According to an analysis by SBI, India could face an annual loss of ₹1.03 lakh crore if it allows US dairy imports, ANI reported.
India’s dairy sector, which plays a crucial role in its rural economy, contributes around 2.5%-3% to the national Gross Value Added (GVA), totalling ₹7.5- ₹9 lakh crore. GVA represents the total value of goods and services produced in the economy after deducting the cost of inputs and raw materials.