India’s firm regulatory stance on animal feed ingredients in dairy production has emerged as a major sticking point in trade negotiations with the United States. The conflict could affect the timeline and scope of a larger trade deal targeted for finalization by fall 2025.
Trade negotiations between India and the United States have hit a significant hurdle due to conflicting standards on dairy imports. The dispute, centered around animal feed practices, poses a major challenge to concluding a broader trade agreement targeted for completion later this year.
India’s stance stems from its strict regulations under vegetarian certification norms, which prohibit dairy imports from animals fed internal organs, blood meal, or tissues from bovine or porcine sources. These requirements, part of India’s broader cultural and dietary standards, directly conflict with current U.S. livestock feeding practices.
The issue is being addressed during the second round of trade discussions in Washington, led by Rajesh Aggarwal, India’s chief negotiator. The talks also aim to resolve concerns around digital taxes and non-tariff barriers.
The United States Trade Representative (USTR) criticized India’s dairy import conditions in its 2025 trade report, labeling them as “onerous.” However, the Indian government remains firm, indicating that any change in its dairy import rules would require the U.S. to align with India’s ethical and regulatory framework.
Meanwhile, India has shown openness to easing tariffs on less controversial items like almonds and walnuts, which are not widely grown domestically. This selective flexibility could help progress the negotiations without upsetting local agricultural stakeholders.
US Vice President JD Vance’s visit to India is also seen as a diplomatic opportunity to bridge the differences and strengthen overall bilateral ties.
This dairy-related impasse comes at a time when the US is actively seeking to expand its export markets, particularly after facing increased tariffs from China. In 2023, China imported over $500 million worth of American dairy products before trade tensions escalated.
Despite the dairy roadblock, Indo-US trade has shown positive momentum. Bilateral trade surged by 11.6% in FY25 to reach USD 86.51 billion, with India recording a surplus of USD 41.18 billion. However, further clarifications from the Indian commerce ministry are still awaited.
As both sides navigate regulatory and cultural differences, the dairy dispute remains a critical focal point in the path toward finalizing a mutually beneficial trade agreement.
