The announcement by US President Donald Trump of a 25 per cent tariff on Indian imports from August 1 has sent ripples through trade circles, raising questions about its potential impact on Indian dairy exporters. However, industry data suggests the direct impact will be modest.
DATA SNAPSHOT:
- US$37 million: Estimated value of core dairy exports to the US in 2024
- Top products for the US.: Ghee, butterfat, cheese, casein
- Top markets other than the US: UAE, Bangladesh, Nepal, the Middle East
India’s dairy exports to the US remain relatively small—estimated at around US$37 million in core products such as ghee, butterfat and cheese. By contrast, India’s overall dairy industry is worth over US$28 billion annually, with most production consumed domestically. The bulk of India’s dairy exports is concentrated in neighbouring and Middle Eastern markets such as the UAE, Bangladesh, and Nepal.
“This is largely a leverage move aimed at pushing India to open its dairy market,” said Prashant Tripathi, Founder of Jordbrukare India. “While niche exporters may face short-term challenges, the domestic base of India’s dairy sector is strong enough to absorb any shocks. What’s critical is ensuring we don’t compromise the livelihoods of millions of small farmers in negotiations.”
Analysts point out that exporters of ghee, casein, and other value-added dairy products to the US may experience margin pressures due to the tariff hike. These companies will need to consider pivoting to alternative destinations, particularly in the Middle East, where Indian dairy products enjoy strong consumer trust and competitive pricing.
The larger concern is the strategic use of tariffs as a bargaining tool in trade negotiations. US negotiators have long sought greater access to India’s agriculture and dairy markets, a move that industry leaders warn could undermine the livelihoods of millions of smallholder farmers and jeopardise food security.
Breakdown of India’s Dairy-Related Exports to the US in 2024
As the next round of bilateral trade negotiations approaches, all eyes will be on how India balances its commitments to rural livelihoods and food sovereignty against growing pressure from Washington to open its markets further.
Source: U.S. Tariffs Stir Concern but India’s Dairy Sector Unlikely to Suffer Major Blow – Jordbrukare