The core of the issue lies in the ongoing India-US trade talks, where the United States is actively seeking significant duty concessions on a range of products, including key dairy items. Should India concede on this front, imported US milk could retail domestically at approximately ₹32 per litre. This figure stands in sharp contrast to the current average Indian domestic milk price of around ₹50 per litre, creating a substantial price differential that would inevitably disrupt the local market and directly impact dairy economics.

This projected price gap is the primary driver behind the anticipated 15-25% decline in Indian milk prices. While such a reduction might theoretically stimulate higher consumption, experts warn it would simultaneously lead to a significant decrease in domestic milk supply, forcing India to increasingly rely on imports, predominantly from the United States. This scenario fundamentally reshapes India’s dairy market dynamics and its long-standing commitment to self-sufficiency.

The economic fallout would be catastrophic for India’s 80 million dairy farmers, a demographic largely composed of small and marginal producers. These farmers, who form the backbone of India’s rural economy, would face immense financial pressure, leading to widespread rural distress and potential widespread employment losses across the agribusiness sector. Protecting these livelihoods remains a top priority for Indian officials in all trade negotiations.