Trade Negotiations Between India and the U.S. Halt: The Controversial 'Non-Animal Milk' Question and the Protective Measures Adopted by Korea, Canada, and Other Countries Regarding Their Markets
In a series of ongoing trade negotiations, several countries, including India, are resisting U.S. demands for greater access to their agricultural markets. This resistance is primarily aimed at protecting domestic farmers and maintaining food security.
India, the world's largest milk producer, is particularly concerned about the impact of cheaper U.S. dairy imports. Small-scale farmers, who dominate the agricultural sector, would struggle to compete with large-scale U.S. producers, whose farms average 187 hectares compared to India's 1.08 hectares.
Political considerations also play a significant role in India's stance. Farmers represent a large and influential voting bloc, and the government faces domestic pressure to safeguard their livelihoods against import competition that would depress local prices.
Food safety and strategic autonomy are other key concerns. India maintains strict norms and seeks to retain control over agricultural policies, refusing to open markets fully to imports or genetically modified crops from the U.S. to preserve national food systems.
High tariffs on agriculture act as a protective barrier against cheaper U.S. imports, with India averaging about 39% in tariffs, sometimes as high as 50%. U.S. tariffs on Indian products remain much lower, around 5% for agriculture. India views reducing these tariffs as risky because it could lead to over-dependence on subsidized American agricultural goods.
Exclusion of agriculture from free trade deals is another strategy India has employed to avoid exposure to foreign competition that might harm rural incomes.
The U.S. also demands reforms on intellectual property, digital trade, and lower non-tariff barriers, but India prioritizes protecting its critical agricultural sector amid these conditions.
Countries such as South Korea, Canada, Switzerland, and Iceland have taken similar stands against these U.S. demands. South Korea, for instance, bans beef imports from cattle older than 30 months due to mad cow disease concerns, and enforces strict GMO regulations. Canada has a supply management system for dairy, poultry, and eggs, limiting production and imposing tariffs on imports exceeding quotas.
The ongoing trade stalemate, including high reciprocal tariffs imposed by both countries, reflects these deep-rooted structural and political concerns. The Indian government explicitly frames its stance as defending the welfare of millions of small farmers and rural communities who might be devastated by a sudden influx of cheaper imports. This resistance also reflects wider geopolitical considerations about maintaining autonomy and securing food supply chains.
Thus, this resistance by India and similar countries is not just a trade policy issue but a complex intersection of economic protectionism, political stability, food security, and sovereignty concerns.
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[2] "India-US trade talks: Why agriculture is a sticking point." The Economist, 2021. [Online]. Available: https://www.economist.com/asia/2021/03/19/why-agriculture-is-a-sticking-point-in-india-us-trade-talks
[3] "India's agriculture sector: why it matters." The Guardian, 2019. [Online]. Available: https://www.theguardian.com/global-development/2019/apr/24/indias-agriculture-sector-why-it-matters
[4] "India's farm sector: challenges and opportunities." World Bank, 2019. [Online]. Available: https://www.worldbank.org/en/country/india/publication/indias-farm-sector-challenges-and-opportunities
- Despite ongoing trade negotiations, India remains adamant about protecting its agricultural sector, citing concerns for small-scale farmers, food safety, strategic autonomy, and maintaining food security, similar to South Korea's ban on beef imports and Canada's supply management system.
- India's resistance to U.S. demands for greater access to their agricultural markets isn't only about trade policies; it's an intersection of economic protectionism, political stability, and sovereignty – aimed at safeguarding millions of small farmers and rural communities from potential devastation posed by a sudden influx of cheaper imports. Additionally, this stance reflects a broader concern about securing food supply chains and asserting national control over agricultural policies, as with maintaining strict norms against genetically modified crops.
