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A U.S.-India trade agreement holds great promise for dairy

Becky Rasdall Vargas

Becky Rasdall Vargas, senior vice president of trade and workforce policy for the International Dairy Foods Association, is a guest columnist for this week’s edition of Cheese Market News®.

The United States and India are quickly forging a new path in trade relations — one that holds great promise for the U.S. dairy industry. Now it is time for U.S. dairy to stand up and voice our support for these negotiations and demonstrate that we value the needs of India’s culture and traditions.

Earlier this month, the Office of the U.S. Trade Representative and India’s Ministry of Commerce and Industry jointly established the terms of reference for a bilateral trade agreement, and last week, U.S. Vice President JD Vance and Indian Prime Minister Narendra Modi met to discuss the potential for an agreement. Clearly, there is growing momentum between two of the world’s largest democracies to deepen economic engagement, reduce trade barriers and unlock new market opportunities.

The International Dairy Foods Association (IDFA) believes this moment represents a once-in-a-generation opportunity to build a meaningful and mutually beneficial dairy trade relationship. India’s pharmaceutical sector is a global powerhouse, with more than 3,000 pharmaceutical companies, 10,000 manufacturing facilities and 650 U.S.-FDA-compliant plants — the highest number outside the United States. The market is currently valued at around $55 billion, with exports contributing $27 billion. The United States alone constitutes more than a third of these exports, primarily comprising cost-effective generic medications. This robust demand underscores India’s reliance on high-quality dairy-derived ingredients, such as pharmaceutical-grade lactose and specialized milk proteins, which are essential in drug formulations.

At the same time, India’s infant nutrition market is experiencing rapid growth, driven by a burgeoning middle class seeking premium, reliable infant formula products. U.S. dairy processors, renowned for stringent quality controls and advanced processing technologies, are uniquely positioned to supply these specialized ingredients, thereby supporting India’s expanding pharmaceutical and infant nutrition sectors.

For too long, the U.S. has questioned India’s religious and cultural requirements for dairy production, rather than rising to meet the country’s specific needs. After 20 years and unchanging religious parameters within India, IDFA believes it’s time for a more thoughtful approach to trade with one of the largest and fastest-growing consumer economies in the world. IDFA and its members fully recognize India’s food culture and long-standing sensitivities around dairy imports.

To that end, IDFA is encouraging U.S. negotiators to pursue several high-level outcomes that would help establish fair and efficient access for U.S. dairy while meeting India’s pharmaceutical needs. To do so, India would also need to provide a clear and simplified certificate and facility registration process, among other issues.

A bilateral trade agreement with India that includes thoughtful, incremental access for U.S. dairy would not only open new economic opportunities but also strengthen diplomatic and commercial ties between our nations. It’s a strategic move for both countries — and the timing has never been better. As dairy competitors like the European Union face declining production, India will need to diversify its sources of pharmaceutically qualified dairy ingredients while the Indian dairy industry continues its stellar trajectory of growth to meet the domestic consumer’s common dairy needs.

The prospect of a U.S.-India trade agreement represents a rare and timely opportunity for the dairy industry. Now, more than ever, our collective engagement is essential to ensure this agreement delivers tangible benefits, from incremental market access to expanded trade relationships. Dairy businesses across the United States must actively voice support, communicate our readiness and highlight our commitment to meeting India’s unique needs — demonstrating how American dairy stands ready as a responsible, reliable partner in global trade.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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