Navigating US-India Dairy Trade Amid Rising Tariffs
Source: dairynews.today
The potential impact of US tariffs on India's niche dairy exports and the opportunity for strategic global diversification.
India's self-sufficiency in dairy reveals its limited reliance on US markets for dairy exports, a sentiment echoed by industry stakeholders who caution about the impact of American tariffs.
Although India holds a significant 24% stake in global milk production, its share in global dairy exports remains a mere 0.25%. Recent data indicates a decline in India's dairy export volumes from 67,572.99 tonnes valued at $284.65 million in 2022-23 to 63,738.47 tonnes valued at $272.64 million in 2023-24.
Despite the recently announced 90-day suspension of an additional 26% tariff by the US, experts highlight the persistent 10% tariff on Indian goods as a barrier. Industry leaders like Devendra Shah, Chairman of Parag Milk Foods, and Ravin Saluja, Director of Sterling Agro Industries, believe that while the direct impact of US tariffs might be minimal, the broader implications on international trade relations could be significant. The tariffs have already stirred protective responses from India, straining bilateral relations and complicating technology and investment exchanges.
For India's dairy sector to thrive, suggested measures include diversifying export markets, establishing agreements with tariff-friendly nations, and leveraging India's unique clean-label and vegetarian products to strengthen its global presence. Preparing for future negotiations, M Ramakrishnan of Primus Partners recommends India gather data on US subsidy programs, such as the Dairy Margin Coverage Programme, to bolster its negotiation position.
As US tariffs create competitive opportunities for India within third-country markets, there is a consensus that strategic diversification, trade diplomacy, and innovation investments will be crucial in reinforcing India's dairy sector against external market shocks.
Although India holds a significant 24% stake in global milk production, its share in global dairy exports remains a mere 0.25%. Recent data indicates a decline in India's dairy export volumes from 67,572.99 tonnes valued at $284.65 million in 2022-23 to 63,738.47 tonnes valued at $272.64 million in 2023-24.
Despite the recently announced 90-day suspension of an additional 26% tariff by the US, experts highlight the persistent 10% tariff on Indian goods as a barrier. Industry leaders like Devendra Shah, Chairman of Parag Milk Foods, and Ravin Saluja, Director of Sterling Agro Industries, believe that while the direct impact of US tariffs might be minimal, the broader implications on international trade relations could be significant. The tariffs have already stirred protective responses from India, straining bilateral relations and complicating technology and investment exchanges.
For India's dairy sector to thrive, suggested measures include diversifying export markets, establishing agreements with tariff-friendly nations, and leveraging India's unique clean-label and vegetarian products to strengthen its global presence. Preparing for future negotiations, M Ramakrishnan of Primus Partners recommends India gather data on US subsidy programs, such as the Dairy Margin Coverage Programme, to bolster its negotiation position.
As US tariffs create competitive opportunities for India within third-country markets, there is a consensus that strategic diversification, trade diplomacy, and innovation investments will be crucial in reinforcing India's dairy sector against external market shocks.
