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India is using its dairy industry as a ‘trump’ card


  • The US wants its dairy industry to have access to India, thus hoping for the Indian government to open up the industry.
  • At an event in Delhi, Indian government officials indicated that talks regarding the dairy sector have already been held, but it is more of a political call rather an economic one.
  • India could partially open up its dairy sector, but it wants more in return from the US.

With US President Donald Trump’s visit to India, talks of a big trade deal between the two countries have been doing the rounds. Reports say that a major factor blocking the trade deal is the dairy industry.

The US wants its dairy industry to have access to India, thus hoping for the Indian government to open up the industry.

However, government officials at an event in India’s national capital Delhi indicated that talks regarding the dairy sector have already been held, but it is more of a political call rather an economic one.

“You want a deal, but you don’t want to concede anything. Please understand that the balance has to be struck, we are not looking at disadvantaging our dairy system but without disclosing more details –- the point is if you can concede a little bit, whether a fraction of the dairy industry can be opened which can be useful for other sectors – that’s what the negotiation is for,” said a top government official.

Earlier, an IANS report had quoted sources to say that India is willing to partially open up its traditionally protected sectors – dairy and poultry – on the condition that the US grants India better terms for its pharmaceutical, textile and agro-machinery products.

India currently has restrictions on dairy imports from animals that have been fed with offal – the leftover products from the butchery of animals.

The opening up of the dairy industry would also mean putting at risk the livelihood of India’s dairy farmers. Recently, the government has approved an allocation of ₹4,458 crore to boost India’s dairy sector which would benefit the over 95 lakh farmers in the country.

The big deal of trade

This could be one of the many roadblocks as each of the countries claim to work towards a trade deal. While Trump himself has expressed unhappiness that the duties India slapped on homegrown American brands like Harley Davidson, India too has been taken off the Generalised System of Preferences (GSP) by the US, which could ease trade.

The arm-twisting has also soured many issues as retaliatory tariffs have been affecting trade.

“At the same time, it also means that President Trump has been criticising India for the deficit in the U.S.-India trade, even though the deficit is barely $20 billion, which is not even 1/10th of the American deficit with China. My point is that globally, President Trump has made having balanced trade an issue,” said Neelam Deo the director of Gateway House.

The US has tried arm twisting India in areas of technology, and bringing India into its existing standoff with China. However, India too has been playing the dodge and attack game to secure its own interests. Even after the visit when both the state heads praised each other for over an hour together, there are many issues pending that need to be addressed before trade flows smoothly between them.

Its is equally important for India whose exports need a boost to ensure its slowing economy is back on track. And, favourable ties with the US can play a large role in it.

Source: Business Insider


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