Editor’s Note
This article highlights India’s decision to exclude dairy products from trade negotiations with the US, a move aimed at protecting domestic farmers and maintaining a longstanding policy of shielding sensitive agricultural sectors from liberalization.
The Indian government has indicated that dairy products will not be included in the proposed India-US trade deal. The aim is to protect the livelihoods of Indian farmers. The government is adhering to its policy of keeping sensitive agricultural sectors away from free trade agreements.
Dairy is considered the backbone of India’s rural economy. Millions of families in the country are connected to milk production, and it is their primary source of income. The government argues that the entry of cheap American dairy products into the Indian market could cause significant harm to local farmers. This would increase pressure on milk prices, and small producers would not be able to withstand the competition. For this reason, India is not in favor of fully opening its dairy market at any cost. A report states that protecting farmers’ income and rural employment is the government’s top priority.
According to the report, the proposed India-US trade deal outlines tariff reductions on industrial and some non-sensitive products. It is proposed to reduce the previous 50% tariff to 18%. The US has claimed that tariffs on Indian products will be reduced, while India will also consider lowering import duties in some areas. However, dairy and major agricultural products will remain outside this scope. Officials from both countries are currently working on the documentation of the agreement.
