Why India's approach to dairy in trade talks is rooted not in protectionism but in cultural fidelity

Successive Indian governments have rejected attempts to dump subsidised US dairy products into India.

Hours after the US imposed an extra 25% tariff on Indian exports,  Prime Minister Narendra Modi categorically said while addressing an international conference, “For us, the interest of our farmers is our top priority. India will never compromise on the interests of farmers, fishermen and dairy farmers. I know we will have to pay a heavy price for it and I am ready for it. India is ready for it,” he said. 

As India engages with the United States in negotiations to stabilise a trade policy and tariff framework for further deepening economic cooperation, it is clear that the potential opening of India’s dairy sector to American dairy imports remains a key issue.

Several nationalist and farmer-centric organisations — notably the Swadeshi Jagaran Manch (SJM) and Bharatiya Kisan Sangh (BKS) — have also backed the government, making it clear that India’s dairy sector should not be opened to US imports.

These concerns surrounding India’s dairy sector, in the context of US imports, are rooted in a complex mix of economic, cultural, and religious factors.

Cultural and Religious Concerns

In India, cow is considered to be a sacred animal and its milk and other dairy products from this milk is used in many religious activities. Milk is offered to Indian deities in temples and is also used in sacred ceremonies like ‘Abhishekam’. Cow Milk and even milk from the other cattle is also used in other pious ceremonies and rituals like ‘Yagna’.

In addition, ‘ghee’, another dairy product made of milk and especially cow milk is an integral part of almost all the rituals and religious ceremonies both at the family as well as the community level. Right from birth to death, cow milk and other products made from it are an inseparable part of India’s cultural and religious milieu.

The dairy industry in the United States is known for the widespread use of animal-derived feed for cows. This feed can include:

• Blood meal (dried animal blood, often from slaughterhouses)
• Bone meal (ground animal bones)
• Meat and bone meal (MBM) from rendered carcasses
• Fish meal and other slaughterhouse by-products

Such practices of using animal-derived feed directly violate religious and cultural norms widely observed in India. An import of US dairy products that are based on such animal-derived feed would hurt the sentiments of Hindu, Jains, Sikhs and all those who follow vegetarianism and use dairy products in their daily life also. The beliefs of Indian consumers could be violated by using such products as there is no provision for transparent labelling of such products in the USA

US Labelling Provisions

In the United States, food labelling regulations for dairy products are overseen by agencies such as the Food and Drug Administration (FDA), the United States Department of Agriculture (USDA), and the Federal Trade Commission (FTC). While the FDA manages labelling for most food items, including dairy, the USDA handles specific certifications like “organic”, and the FTC oversees advertising claims.

However, there is no federal requirement to disclose whether dairy products come from cows fed on animal-derived inputs such as blood meal, meat and bone meal, or fish meal.

This omission exists because US labelling laws primarily focus on food safety and final product characteristics, such as nutritional content or allergens, rather than the ethical or religious dimensions of production. Unless the production method directly affects human health, the origin of feed ingredients is not considered relevant from a regulatory standpoint.

As a result, milk from cows fed on slaughterhouse by-products is treated the same as milk from grass-fed or vegetarian-fed cows in the US market. There is no distinction unless manufacturers voluntarily choose to label such information, which is typically done only in niche markets such as organic or vegan products. This regulatory gap poses serious concerns for countries like India, where such feed practices have deep religious and cultural implications.

Economic Concerns

The US federal government heavily subsidises its dairy industry to make it globally competitive. These subsidies give the US dairy sector the capacity to undercut dairy farmers in other countries.

According to an analysis by Washington-based think tank Environmental Working Group (EWG), the US Department of Agriculture has spent at least $72 billion in subsidies for livestock and seafood producers in recent decades. Between 1995 and 2023, the USDA granted over $32 billion in “disaster payments” and “Covid-19 pandemic relief” to livestock operators.

Between 1995 and 2023, the USDA granted the billions in payments to support livestock operators, reveals this analysis. More than $32 billion went as subsides under the heads of ‘disaster payments’ and ‘Covid-19 pandemic relief’. Other major animal agriculture expenses include more than $20 billion in livestock commodity purchases and nearly $17 billion in other subsidies, such as those for dairy operators, says the EWG report.

Further, the crop insurance subsidies to livestock operators in the US have increased significantly in recent years. Since 2018, livestock insurance participation surged from 2,873 policies to 16,384 policies in 2023, and total spending rose from $3.5 million to $419 million.

Notably, this analysis of subsidies to livestock operators did not include the commodity and crop insurance payments made to farmers who grow animal feed such as corn and soybeans. If one adds these subsidies also, it is clear that US is spending unprecedented amount of money as subsidy to make its dairy industry sell its products cheaper across the world, much below their production cost. This is a sure recipe for disaster for the dairy sectors in other countries, especially India.

On top of this, there are several health implications of the US dairy products as those dairy farms are known to use high levels of antibiotics and artificial hormones to boost livestock productivity. This is another reason why India has consistently resisted US efforts to open its dairy market. Organisations like the SJM and BKS have been steadfast in their opposition since the early 2000s, and successive Indian governments have rejected these attempts to dump subsidised US dairy products into India.

Notwithstanding the tariff threat from US President Donald Trump, the Indian government is not inclined to open its markets to US dairy products. Doing so would not only devastate the domestic dairy industry and millions of small farmers who depend on it for their livelihoods, but would also gravely damage India’s socio-cultural fabric.