As trade tensions escalate in late 2025, dairy and agriculture have become critical battlegrounds in India-US negotiations. With the Trump administration imposing tariffs up to 50% and demanding market access, it’s essential to examine what these concessions would mean for India’s dairy ecosystem.
The Trade Landscape
Bilateral goods trade between India and the US reached approximately $129 billion in 2024, with India maintaining a surplus of nearly $46 billion. This imbalance has prompted Washington’s aggressive stance, while Indian officials have declared agriculture and dairy as “red lines” that won’t be compromised.
Four Key Products Under Scrutiny
Cheese: A Manageable Opening?
The US exported approximately 508,808 tonnes of cheese in 2024, while India imported only $13.5 million worth in 2023. Opening India’s market to premium cheese would create niche opportunities for US suppliers without severely disrupting domestic dairy, which focuses on mass-market milk and traditional products. However, this seemingly benign concession could set precedents for broader market access demands.
Whey Protein: The Misleading Narrative
The US dominates global whey exports with a 47% market share, valued at $700-850 million in 2024. Here’s the critical fact: India already imports significant whey protein concentrates from the US, which held roughly 21% of India’s total whey imports between February 2021 and September 2025.
This exposes a fundamental flaw in trade rhetoric. Claims that “no dairy products enter India due to animal-derived feed restrictions” are misleading—commercial whey shipments already flow freely. Further tariff reductions would simply hand advantages to US producers already dominating the market while risking displacement of domestic processors.
Maize: Political Barriers Remain
The US exported nearly 69.8 million metric tonnes of corn in 2024/25, yet plays almost no role in India’s 0.9-1.0 million tonne maize imports, primarily from Myanmar and Ukraine. India’s stringent GM crop restrictions create insurmountable barriers. The 2020-2021 farmer protests, which forced agricultural reform repeal, demonstrate the political sensitivity. Any GM concession would trigger similar resistance, making this largely symbolic.
Casein: A Lose-Lose Proposition
This represents the starkest warning. New Zealand dominates global casein exports at $1.06 billion annually—more than ten times India’s US exports. India’s casein shipments to the US dropped dramatically post-2023, accounting for barely 3% of total exports by mid-2025.
Tariff relaxation would primarily benefit New Zealand, Ireland, and the Netherlands—not US or Indian producers. India would concede market share to third-party competitors with zero reciprocal gain.
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Why India’s Red Lines Matter
India’s dairy self-sufficiency, achieved through Operation Flood beginning in the 1970s, transformed the nation from milk-deficient to the world’s largest producer. This wasn’t just economic policy—it was nation-building.
Unlike large-scale American dairy farms, India’s dairy economy involves millions of smallholders keeping 2-5 animals alongside crops. For rural households, dairy provides crucial supplementary income and resilience. Wholesale tariff removal would reverse decades of progress and place nutritional security at the mercy of international markets.
Additionally, cultural-religious dimensions complicate negotiations. Hindu tradition requires vegetarian-fed cattle for milk purity, while American dairy cows often consume animal-based feeds—a practice many Indians find unacceptable.
What India Must Demand
Any tariff softening must follow these principles:
Comprehensive Reciprocity: Market access for US products must be matched by equivalent access for Indian exports across pharmaceuticals, textiles, engineering goods, and services—not just agriculture.
Tariff Parity: If India reduces tariffs, the US must reduce tariffs on equivalent Indian products proportionally.
Safeguard Mechanisms: Agreements must include provisions to reimpose protections if import surges threaten domestic producers.
Staged Implementation: Phase tariff reductions over time with clear benchmarks and review mechanisms.
Protection of Smallholders: Special provisions must protect small and marginal farmers who lack resources to weather market shocks.
The Bottom Line
Current US demands would create asymmetric benefits favoring American and third-party exporters while offering limited reciprocal advantages. In casein particularly, India would make concessions primarily benefiting New Zealand and EU competitors—a strategic blunder.
India’s transformation from food-deficit nation to dairy powerhouse represents one of the great development successes of the past half-century. Unless negotiations enable Indian companies to regain tariff parity and expand exports while protecting domestic value chains, unilateral relaxation will undermine decades of progress.
Fair trade requires fairness to both sides. India’s negotiators must ensure any agreement respects the nation’s development needs, strategic autonomy, and the livelihoods of millions—or reject concessions that recreate patterns of dependency India spent seventy years overcoming.
This analysis is based on official trade statistics, industry reports, and current developments in U.S.-India trade negotiations as of December 2025. The dairy industry landscape continues to evolve, and readers should consult updated sources for the latest developments.
References and Further Reading:
- U.S. Department of Agriculture Trade Data (2024-2025)
- India Ministry of Commerce and Industry Reports
- Tridge Global Trade Intelligence
- Reuters Coverage of India-US Trade Negotiations
- Business Today India Trade Analysis
- DairyReporter Industry Coverage