The Milk India Refuses To Drink: Why ‘Non-Veg Dairy' Is A Red Line In Trade Deal With US

India.com

2 days ago

New Delhi/Washington: In the backrooms of New Delhi's diplomatic zone, trade officials kept circling one issue that simply would not move. It was not fighter jets, data servers or farm subsidies. It was milk. Yes, milk.
One of the biggest stumbling blocks in the India-U.S. trade pact is white, creamy and sacred to millions. And the problem lies not in how it is consumed, but how it is produced.
Washington wants access to India's $16.8 billion dairy market, the largest in the world. It wants to sell its butter, cheese and milk powder to a country that churns out over 239 million metric tonnes of milk a year.
But New Delhi is not opening that door. At the centre of India's resistance lies one demand – an assurance that the milk entering Indian homes comes from cows that were never fed meat, blood or animal remains.
No exceptions. No compromises. Indian officials are calling it a red line.
The idea of 'non-veg milk' does not sit well with millions of Indian households, especially vegetarians who see dairy as nutrition as well as ritual. Ghee is poured into sacred flames during prayer. Milk is bathed over deities. The concept of cows being fed pig fat or chicken remains crosses dietary boundaries and lines of faith.
Trade experts struggled to explain this to Washington. 'Imagine eating butter made from the milk of a cow that was fed meat and blood from another cow. India may never allow that,' said Ajay Srivastava from the Global Trade Research Initiative in New Delhi.
Despite U.S. claims that the concern is exaggerated, several American reports confirm the reality. A Seattle Times investigation documented how American cattle feed can legally include ground-up remains of pigs, horses and poultry. Even chicken droppings, known as poultry litter, sometimes make their way into the mix. The logic is economic – feed animals cheap and grow them fast. For Indian regulators, it is simply unacceptable.
India's Department of Animal Husbandry mandates certification on all imported food items, including milk, to ensure no animal-derived feed is involved. This has long been criticised by the United States at the World Trade Organisation (WTO) as a 'non-scientific barrier'. But for India, it is not about science but belief.
In 2006, the Indian government formalised this belief in trade rules. It resulted into high tariffs – 30% on cheese, 40% on butter and a whopping 60% on milk powder. For countries like New Zealand or Australia, breaking into India's dairy space is nearly impossible. For the United States, it is a billion-dollar hurdle.
India's dairy sector feeds over 1.4 billion people. It employs more than 80 million, many of them smallholder farmers. Cheap American imports, experts say, could collapse local markets. A report from the State Bank of India estimates an annual loss of Rs 1.03 lakh crore if U.S. dairy is allowed to flood in. That is nearly 2.5-3% of the country's entire Gross Value Added. And the risk is not theoretical.
'If American butter comes in cheap, our milk prices drop. What happens to the village woman who sells five litres of milk a day?' asks Mahesh Sakunde, a dairy farmer from Maharashtra.
Meanwhile, Washington sees India's refusal to open up as 'protectionist'. But India's negotiators stood firm. 'There is no question of conceding on dairy. That is a red line,' said a senior Indian official.
The United States exported over $8.2 billion worth of dairy last year. Gaining access to India's vast market could supercharge those numbers. But Indian officials are unwilling to allow milk from cows that ate meat to be offered at temple altars or poured into toddler cups.
And so, while the two countries hammer out trade terms with hopes of reaching $500 billion in bilateral commerce by 2030, the dairy debate remains unresolved. It may seem like a small detail in a massive negotiation, but in India, this is sacred, culture and a line that will not be crossed.