India’s dairy producers have rallied to push back against a potential free trade deal with the United States. Negotiation between the U.S. and India have been ongoing since 2018. The trade talks have stalled due to the opposition waged by India’s dairy sector. The dairy industry in India has a tremendous amount of influence due to the substantial number of dairy farmers in the country.
India’s dairy industry is comprised of tens of millions of farmers. Dairy production is responsible for generating a substantial amount of economic activity for India’s significant rural population. The vast majority of the dairy sector is made up of small farmers. The dairy sector in India is valued at approximately $110 billion. Managing Director of the Gujarat Cooperative Milk Marketing Federation, R.S. Sodhi has said in multiple reports that the country’s dairy producers are firmly against opening up to dairy imports. The Gujarat Cooperative Milk Marketing Federation sells products under the Amul brand and is the largest dairy cooperative in India.
India’s dairy market appears to be a lucrative one for major dairy exporters such as the U.S., the European Union, and China. Officials in India have said that dairy is essentially off the table when it comes to trade agreements. Dairy has been a significant issue in discussions related to the proposed India-European Free Trade Association. The agreement would reportedly include Switzerland, Iceland, Norway, and Liechtenstein. New Zealand and Australia have also been working to develop a bilateral trade agreement with India as well.
Some of the concerns about opening India to more dairy imports are related to the dairy infrastructure in India. There is a worry that the country’s small dairy farmers would not be able to compete with more modern forms of production. India’s dairy sector is also concerned about sanitary and phytosanitary regulations. Following more stringent sanitation rules would also make it difficult for Indian producers to compete.