Why is ‘non-veg’ milk a sticking point in India-US trade deal?

The trade deal between India and the United States has hit a roadblock. As talks continue, the two sides are struggling to find a common ground on agriculture and dairy.

India is reportedly hesitant about allowing American dairy imports into the country due to cultural concerns over “non-veg milk”. This comes amid US President Donald Trump’s August 1 deadline to reach a deal with countries or face steep tariffs.

Let’s take a closer look.

What is ‘non-veg’ milk?

India is pressing the US for a strict certification to ensure that the imported milk comes from American cows that have not been fed animal-based products like meat or blood.

As per reports, India has deemed it a “non-negotiable red line”, citing religious and cultural concerns.

Around 38 per cent of India’s population identifies as vegetarian, according to a 2023 World Atlas report. Hindus use milk and ghee in religious rituals every day.

“Imagine eating butter made from the milk of a cow that was fed meat and blood from another cow. India may never allow that,” Ajay Srivastava of Global Trade Research Institute (GTRI), a New Delhi-based think tank, told PTI.

India’s Department of Animal Husbandry and Dairying mandates veterinary certification for food imports. A condition to issue these certificates states: “The source animals have never been fed with feeds produced from meat or bone meal including internal organs, blood meal and tissues of ruminant origin and porcine origin materials except milk and milk products.”

What the US feeds its cows

The feed for cattle in the US includes animal products. “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,” as per a 2004 report by Seattle Post-Intelligencer.

While there are regulations on animal ingredients in cattle feed to prevent the spread of diseases, a mixture of bedding material, feathers, spilled feed and chicken droppings can be used as a low-cost feed additive, as per reports.

Why India is unlikely to concede on dairy

New Delhi has banned the imports of dairy products from cows that were fed animal products.

India, the largest producer and consumer of milk, may not agree to opening its dairy market to the US. The dairy sector feeds more than 140 crore Indians and employs over eight crore people.

India’s milk production was reported at 239.30 million tonnes during 2023-24, according to the Basic Animal Husbandry Statistics 2024.

“There is no question of conceding on dairy. That’s a red line,” a senior government source told India Today TV earlier this month.

Not just religious and cultural considerations, India also has to look at its economic aspects.

According to a recent analysis by the State Bank of India (SBI), Indian dairy farmers could suffer annual losses of Rs 1.03 lakh crore if the sector is opened to American imports.

The analysis underlined the impact on the income of small-scale dairy farmers, noting significant subsidies received by the US dairy industry.

“If the dairy sector is opened up, price of milk in India is likely to drop by at least 15 per cent which could cause potential annual loss of Rs 1.03 lakh crore to dairy farmers,” ANI reported, citing the SBI report.

The dairy sector is important to India’s rural economy, as it generates about 2.5-3 per cent of the national Gross Value Added (GVA), equivalent to Rs 7.5-9 lakh crore.

“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,” Mahesh Sakunde, a farmer from Maharashtra, told Reuters.

The US has reportedly termed India’s insistence on not ceding ground on dairy and agriculture as an “unnecessary trade barrier”.

India’s resistance stems from its efforts to shield small-scale dairy farmers. And it seems unlikely New Delhi will budge from its position.

Source : Dairynews7x7 July 17th 2025 First Post With inputs from agencies