India is examining whether it can conclude trade agreements with the United States, the European Union and Australia. The Asian superpower is considering opening its borders to more Western products, including dairy, due to trade problems with China. The powerful Indian dairy sector is vehemently against it.
India has been in talks with the European Union for some time about a so-called Indian-European Free Trade Association, Bloomberg reported. Trade talks that also include Iceland, Liechtenstein, Norway and Switzerland.
India has also been negotiating a trade deal with the United States since 2018 and trade relations with Australia and New Zealand are being explored. However, the local Indian dairy sector is strongly resisting, causing the government of Prime Minister Nadrendra Modi to hesitate to open the borders for free to dairy products from the Western world.
Never let it
The Indian dairy sector fears that importing foreign dairy will mean the end for many dairy farmers in the country. "We will never allow it," said RS Sodhi, CEO of the largest Indian dairy cooperative GCMMF. This group markets the products under the Amul brand. Sodhi points out that the organized dairy sector accounts for only $30 billion of the country's $110 billion worth of the dairy sector.
Indian farmers earn about two-thirds of their total income from raising dairy cattle. "Why do we need imports if they destroy the livelihoods of 100 million people," said Sodhi, who also indicates that knowledge and technology are welcome in India. The industry is concerned about the strict production requirements it will then have to follow in order to compete in domestic and global markets.
make a decision
The question is therefore whether the Indian government will ultimately take the plunge. The country already withdrew from economic talks with neighboring countries last year, also because of domestic dairy.
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.