US signals softer stand in BTA: Access to high-end cheese, not milk market

US signals softer dairy stance, eyeing premium cheese exports to India as trade talks restart; India wary of opening sensitive farm sector

Signalling a possible softening of its stance on opening the dairy sector in India under the proposed trade deal, a US official said Washington is mainly interested in exporting premium cheese to India and has little intention of competing in the mass-market milk segment, which remains highly sensitive for New Delhi. 

“It doesn’t make sense to export milk or yogurt to India. We are talking about high-end products like certain cheese varieties which may be 2-5 per cent of people will consume,” the official said, requesting anonymity. 

While this may open a window for convergence of negotiating positions on the sensitive dairy sector, it is not yet clear whether this will be acceptable to India. The country has not opened the dairy sector even for niche products despite demands from Australia and the UK under trade deals. 

India already imports small quantities of premium cheese such as mozzarella, grated or powdered cheese, processed cheese not grated, blue-veined cheese, and artisanal cheese at import duties of 30–40 per cent. In 2024-25, India imported various kinds of cheese worth $10.85 million. The key sources of such cheese were Lithuania (($1.94 million), Estonia ($1.82 million), Italy ($1.52 million), and the UK ($1.2 million). 

The official said there is now more willingness to talk, with both sides having overcome the earlier phase of rhetoric. “Both sides were very close to a deal until the last round of negotiations. When negotiators meet next, they may like to bring new issues to the table,” he added. 

However, the official insisted that India needs to reform its agricultural market, which remains uncompetitive due to low productivity. Since India uses corn for extracting ethanol, the US sees scope for exporting genetically modified (GM) corn to India, 

as it would not fall under the country’s stringent GM norms for food products. 

The US president, Donald Trump, has nominated Sergio Gor as the next ambassador to India. The official said the Senate clearance of his appointment may take months if he doesn’t jump the queue. “We are still hopeful of a faster clearance but we are not sure about it,” he added. 

Bilateral trade talks stalled mainly because of India’s refusal to grant the US unhindered market access to its politically sensitive agriculture and dairy sectors. Trump’s decision to impose a 25 per cent reciprocal tariff, along with an additional 25 per cent levy on India for purchasing Russian oil, had previously strained bilateral ties.

 

Signalling an easing of tensions, President Trump and Prime Minister Narendra Modi last week posted conciliatory messages on social media, expressing optimism about resolving outstanding issues and concluding a trade deal at the earliest. India’s trade minister Piyush Goyal has said that the country’s trade parleys with the US are progressing well as both countries are aiming to finalise the first tranche of the bilateral trade agreement by November.