Milk at a Crossroads: Why ‘Non-Veg’ Milk Is Blocking the India-US Trade Deal

What Is ‘Non-Veg’ Milk and Why Is It Controversial?

In India, milk is more than just nutrition—it is deeply intertwined with religion, culture, and daily life. So, when American dairy products enter the conversation in India-US trade talks, the cultural significance of milk becomes central to negotiations. The issue currently holding up the proposed bilateral trade deal is India’s objection to what it refers to as “non-veg milk.”

The term refers to milk produced by cows that are fed animal-derived substances, such as meat, blood meal, or bone meal. India insists that any dairy imports must come from cows raised on strictly vegetarian feed. This is non-negotiable, say Indian officials, citing religious sensitivities and public sentiment.

About 38% of India’s population identifies as vegetarian, and dairy—especially milk and ghee—is used in daily religious rituals. For millions of Hindus, consuming milk from cows fed animal by-products is considered impure, and potentially sacrilegious. As Ajay Srivastava of the Global Trade Research Institute put it: “Imagine eating butter made from the milk of a cow that was fed meat and blood from another cow. India may never allow that.”

What the US Feeds Its Cows

In the United States, the cattle feed industry includes a wide range of substances. According to a report by Seattle Post-Intelligencer, US cows may be fed animal-derived ingredients like pig or horse blood, fishmeal, tallow (rendered animal fat), and even poultry litter—a mixture that can contain spilled feed, feathers, and chicken droppings.

Though the US has regulations to prevent disease transmission through feed, these practices stand in direct conflict with India's religious and ethical standards. For Indian officials, the concern is not just about animal feed—it’s about purity and faith.

India's Department of Animal Husbandry and Dairying mandates that all dairy imports be certified to confirm the cows were never fed animal-based products. This stipulation has been criticized by the US at the World Trade Organization (WTO), where it’s labeled a “non-scientific trade barrier.”

Why India Refuses to Budge

For India, the resistance isn’t only cultural—it’s also economic. India is the world’s largest producer and consumer of milk, producing 239.3 million tonnes during 2023–24, according to the Basic Animal Husbandry Statistics 2024. The dairy industry is crucial to the rural economy, employing over 8 crore (80 million) people and contributing 2.5–3% of India’s Gross Value Added (GVA)—equivalent to ₹7.5–9 lakh crore annually.

Opening the sector to cheaper, subsidized US dairy products could severely hurt local farmers. A recent State Bank of India (SBI) analysis estimates that small-scale Indian dairy farmers could lose up to ₹1.03 lakh crore every year if the market is opened to US imports.

“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,” said Mahesh Sakunde, a dairy farmer from Maharashtra.

US dairy products, heavily subsidized by the American government, could flood Indian markets, driving down domestic milk prices by an estimated 15%. This would place immense pressure on India's small-scale dairy producers, most of whom operate on razor-thin margins.

A Stalemate in Trade Talks

The India-US trade deal, already under pressure due to multiple sticking points, now faces a major impasse with the dairy dispute. The US sees India’s certification requirement as a protectionist measure, while India views it as essential to safeguard cultural values and rural livelihoods.

With the US pushing for a swift conclusion to the deal—especially under President Donald Trump's August 1 deadline to avoid additional tariffs—the standoff over dairy could delay or derail broader negotiations. For India, the stakes are simply too high to concede.

Cultural Convictions Meet Economic Realities

At first glance, the debate over “non-veg” milk may seem symbolic—but at its core, it’s about sovereignty, sustainability, and safeguarding the livelihoods of millions. India’s dairy sector is not just an industry; it’s a lifeline for rural families and a pillar of cultural identity.

Given the spiritual reverence for cows and the economic vulnerability of small farmers, India is unlikely to open its doors to US dairy without ironclad guarantees. What may appear to the US as an “unnecessary trade barrier” is, for India, a moral and economic red line.

Unless a mutually respectful solution is found, ‘non-veg milk’ may remain the quiet deal breakermanish in one of the world’s most anticipated trade negotiations.