A diplomatic rupture between India and the U.S. is escalating as the Trump administration enforces an additional 25% tariff, doubling total duties on many Indian exports—including potential dairy products—to 50%. This punitive action is tied to India’s continued import of discounted Russian oil amid the Ukraine conflict .
For the Indian dairy sector, the stakes are high: India has explicitly designated agriculture and dairy as “non-negotiable” territory in trade talks, citing cultural sensitivities, consumer protection and livelihoods of over 70 million rural farmers a. These key red lines reflect Delhi’s intent to safeguard its cooperative-dominated dairy ecosystem.
Despite trade tensions, negotiations persist. A U.S. delegation is scheduled to visit New Delhi later this month for the sixth round of bilateral trade talks. India’s position is clear: no duty concessions or market access will be provided for dairy or GM-related food products .
This escalation coincides with the collapse of prior trade deal momentum. A blur of miscommunication and political miscalculation saw India expecting tariff caps around 15%, only to be blindsided by abrupt tariff increases tied to its energy choices . For now, India appears willing to explore damage control through limited concessions, yet dairy remains firmly protected.
Industry Insight:
The dairy sector’s exclusion from tariff negotiations reaffirms its status as a protected pillar of rural economy. Exporters and investors will need to pivot strategies accordingly—India’s dairy trade will remain defensively oriented despite broader geopolitical disruption.
Source : Dairynews7x7 Aug 7th 2025