This resolute policy is directly rooted in the unique socio-economic structure of Indian milk production. The government, citing the welfare of approximately 10 crore (100 million) dairy farmers, asserts that opening the sector would severely undermine their livelihoods. This vast population of producers is predominantly composed of small and marginal farmers, with the vast majority owning just two to five animals, making them highly vulnerable to the economic volatility introduced by international Global Dairy Trade.

The pressure to integrate the Indian dairy market is particularly acute during Free Trade Agreement (FTA) negotiations, such as the potential deal currently being debated with the UK. International trade partners seek to gain a foothold in this massive consumer base. However, the Minister of Commerce and Industry has made it explicitly clear that the government views the protection of “our people”—the 100 million farmers—as a fundamental national priority over trade liberalization benefits in this specific sector.

The government’s non-negotiable approach is driven by the strategic objective of ensuring national self-sufficiency in milk and dairy products. By keeping the market closed, India is safeguarding its intricate domestic procurement, processing, and distribution networks. This strategic protectionism guarantees continued food security and market stability for its enormous domestic consumer base without relying on external supply chains, a critical factor in agribusiness policy.