India plans to shield dairy sector in US trade deal using WTO-compliant barriers

India has long maintained a certification requirement for imported dairy products

India plans to use World Trade Organization (WTO)-compliant non-tariff barriers (NTBs) to shield its dairy sector from U.S. market access as part of the ongoing bilateral trade negotiations aimed at more than doubling two-way commerce to 500 billion dollars by 2030, a senior government official said.

“Some items like dairy will be caught in NTBs for India,” the official told Moneycontrol, adding that the customs department is working closely with the commerce ministry to ensure sensitive sectors such as dairy and agriculture are protected.

The negotiations with the United States come at a time when President Donald Trump, in his current term, announced a 26 percent tariff on U.S. imports from India last week. The move has raised concerns among Indian exporters, even as New Delhi explores deeper bilateral ties across other sectors.

According to the official, the Indian government is hoping to exclude dairy from the trade deal by invoking NTBs tied to food safety and cultural standards, particularly due to the possibility that American cattle may be fed non-vegetarian feed, which goes against Indian norms.

"This gives India a legitimate ground to keep dairy out of the agreement, while still offering concessions in other areas,” the official said.

WTO-compliant NTBs

Non-tariff barriers – such as or product certification norms – can be considered WTO-compliant if they are based on legitimate objectives, including public health, animal welfare, and cultural or religious concerns.

India has long maintained a certification requirement that imported dairy products must come from animals not fed animal-derived feed, a norm that stems from religious and cultural sensitivities in a largely vegetarian population.

Balancing sensitivities

While India is looking to liberalise market access to other sectors, it remains cautious about opening up dairy and agriculture – two politically and culturally sensitive sectors.

India has adopted a similar stance in its trade negotiations with other partners, including Australia. In its ongoing talks with the European Union – where the EU is pushing for tariff cuts on cheese and skimmed milk powder – India has consistently resisted pressure to liberalise market access in the dairy sector.

By embedding NTBs within its trade framework, India aims to create WTO-consistent safeguards that uphold domestic standards without breaching international trade rules, the official said.

Despite being the world’s largest milk producer, India’s share in the global dairy trade remains marginal, accounting for only around 0.25 percent of global exports. According to data from the Agricultural and Processed Food Products Export Development Authority (APEDA), India exported dairy products worth over Rs 2,200 crore in FY23. However, exports to the United States form a small share, primarily limited to ghee, butter, and milk-based products.