India and the United States stand as the two largest milk producers in the world. However, their paths to dairy dominance could not be more different. While the US dairy industry has become a streamlined, technologically advanced sector powered by large commercial farms, India remains rooted in a decentralized model, where over 75 million smallholder farmers form the backbone of the sector. Despite the structural differences, both countries&rsquo; dairy industries are vital to their economies, food security, and rural livelihoods. But with global trade talks and potential market openings, especially from US dairy exporters eyeing the Indian market, the future of Indian cooperatives and small dairy entrepreneurs could face unprecedented challenges.
<h3 data-start="979" data-end="1041">India&rsquo;s Dairy Landscape: Volume Driven, Grassroots Powered</h3>
India produces around 230 million tonnes of milk annually, nearly doubling the US production of approximately 100 million tonnes. However, the Indian dairy industry is fragmented across more than 75 million dairy farms, most of which are run by families with 2 to 3 cattle. The annual milk yield per cow in India is around 1,248 kilograms, significantly lower than the US average of 9,633 kilograms. This yield gap stems largely from breed quality, suboptimal feed, and limited access to technology.
India&rsquo;s dairy sector contributes approximately $143.5 billion to the GDP and provides direct and indirect employment to over 80 million people. Most of the milk produced is consumed domestically. India exports a modest volume of dairy products but remains heavily self-reliant. Cooperatives like Amul and Nandini play a central role in ensuring that milk producers, especially in rural areas, get fair prices while also ensuring affordability for consumers.
<h3 data-start="2003" data-end="2055">America&rsquo;s Dairy System: Fewer Farms, More Output</h3>
In the United States, there are roughly 31,657 dairy farms producing a total of 226 billion pounds (approximately 102 million tonnes) of milk per year. These farms average about 337 cows each, and each cow yields about 10,780 kilograms of milk annually. The industry contributes around $40 billion to the US GDP and sustains around 3 million jobs.
Technology is a hallmark of US dairy operations. Automated milking systems, precision feeding, advanced veterinary care, and genetic selection allow for highly efficient, high-yielding herds. Additionally, waste management systems, renewable energy use, and strict environmental regulations guide sustainability practices in American farms.
<h3 data-start="2748" data-end="2790">Consumption, Trade, and Policy Clashes</h3>
India&rsquo;s dairy sector is largely inward-looking, focused on meeting its vast domestic demand. Meanwhile, the United States is a major exporter of dairy products, often looking for markets with large populations and growing middle classes. This dynamic makes India an attractive, yet protected, market for American dairy exporters.
India has historically resisted opening its dairy market to US imports due to concerns over livelihood losses among smallholders and cooperatives. If American milk powder, cheese, or whey were allowed to flood Indian markets at subsidized global rates, it could undercut local production and destabilize decades of cooperative success. This includes not just the economic impact but a potential social fallout in the form of rural unemployment and migration.
<h3 data-start="3583" data-end="3624">The Dairy Sector&rsquo;s Economic Ecosystem</h3>
Dairy farming in India is more than just an agricultural sub-sector. It is a social safety net, a women's empowerment tool, and a pillar of rural sustenance. More than 70% of dairy workers in India are women, and dairy cooperatives have empowered millions of families by providing regular income. India&rsquo;s White Revolution, led by Dr. Verghese Kurien, created a robust cooperative model that withstood price shocks and built food security for the country.
On the other hand, the US model showcases what scale, automation, and productivity can achieve. Its model provides lessons in logistics, technology integration, and export competitiveness. However, its structure is less socially inclusive, and less resilient to small market disruptions affecting large-scale farms.
<h3 data-start="4399" data-end="4440">What Happens if India Opens the Door?</h3>
Allowing unrestricted American dairy imports could lower prices for urban consumers in the short term, but it risks collapsing the pricing mechanism that currently sustains millions of Indian dairy producers. Indian cooperatives and private sector players may not withstand the price war, leading to industry consolidation, job losses, and increased dependency on foreign supply chains.
Moreover, the vast difference in farming systems makes a level playing field impossible without protective tariffs and import safeguards. American dairy is often subsidized through government support and benefits from cold-chain infrastructure India is still building.
<h3 data-start="5100" data-end="5144">The Way Forward: Learning, Not Competing</h3>
The future lies not in a price war but in knowledge exchange and collaboration. India can learn from US innovations in breeding, waste management, and feeding techniques, while the US can study India&rsquo;s grassroots cooperative systems and community-driven supply chains. Both nations must prioritize sustainability, food security, and fair market access over short-term trade wins.
India&rsquo;s dairy sector is not just about milk, but about lives. It's a story of grassroots resilience, economic self-reliance, and rural empowerment. While global trade remains inevitable, it must be balanced with the long-term stability of domestic livelihoods.

A deep dive into dairy economics and global trade tensions between India and US

India vs US: The Global Dairy Battle Unfolds

A deep dive into dairy economics and global trade tensions between India and US

July 19, 2025 | 24:13 IST