Dairy is the last big roadblock in the US-India trade deal — the one issue neither side can move on.
Marco Rubio arrives in India this week, skipping Delhi for Mumbai and Jamnagar.
Updated: October 19, 2026, 11:00 IST
Quick Read
- Dairy market access is the biggest remaining obstacle in the US-India trade deal (Telangana Today, Oct 17).
- Marco Rubio visits India this week, focusing on Mumbai (investment) and Jamnagar (Mukesh Ambani’s refining complex, the world’s largest).
- Piyush Goyal says the first tranche is “finalised… in legal drafting” — but India will sign only if it gets an edge over rivals like Bangladesh and Vietnam.
The US-India trade deal is nearly done, except for one thing. Dairy market access is the biggest remaining obstacle, Telangana Today reported on October 17. Everything else — tariff cuts, industrial goods, farm products — is close to settled. Dairy is not.
> Also read: Trump’s tariff waiver for India
Why dairy is the “last 1%”
In India, milk isn’t big business. It’s small farmers. Millions of families keep a few cows or buffaloes and sell milk to village co-operatives — the Amul model from Gujarat. These co-ops are farmer-owned, and they carry real political weight.
If India opened its market to American dairy, cheap imports could crash what those families earn. No government in Delhi will risk angering that vote bank. That’s why dairy is called untouchable in Indian politics: the economics are small per farmer, but the politics are huge. One signature on a dairy deal could cost more votes than the whole trade pact is worth.
Rubio’s unusual route
US Secretary of State Marco Rubio visits India this week — and his plan skips the capital. He’s focusing on Mumbai, for investment talks, and Jamnagar, home to Mukesh Ambani’s refining complex, the world’s largest, the Malay Mail reported on October 18. Energy and investment are the focus, not Delhi’s negotiating rooms.
The signal is clear: Washington wants the money side of the relationship moving even while the trade text stays stuck.
A legal cloud over the deal
There’s another problem, this one in American courts. US court challenges struck down the reciprocal-tariff basis of the February framework. “The value of the US offer became unclear,” trade expert Ajay Srivastava said.
In plain words: part of what Washington promised was built on tariffs that courts have now questioned. So nobody is sure what the American offer is actually worth anymore. That fog hangs over every negotiating table.
Where the two sides stand
The February framework had the US cutting its reciprocal tariff on Indian goods from 25% to 18%, while India agreed to cut duties on industrial goods and farm products — tree nuts, fruit, soybean oil, wine and spirits.
> Also read: FTA takes effect: 100% duty-free exports to NZ
Commerce Minister Piyush Goyal said on October 15 that the first tranche is “finalised… in legal drafting.” But he added a hard condition: India will implement it only if it gets a “competitive advantage over our peer countries” — meaning US tariffs on Indian goods must be no higher than what Bangladesh, Vietnam, or Indonesia face.
External Affairs Minister S. Jaishankar says talks are nearing a “landing point.” USTR Jamieson Greer was cooler: on October 2 he said a deal was “not imminent.” Finance Minister Nirmala Sitharaman said on October 16 she wants it concluded “at the earliest.”
The stakes are visible in the numbers. India’s goods exports to the US were $42.79 billion in April–August, up from $40.39 billion a year ago, Reuters reported on October 15. The trade surplus runs around $34 billion for FY25/26.
> Also read: Graham Act tariff deadline
> Also read: rupee at all-time low
FAQ
### What is blocking the US-India trade deal?
Dairy market access. The US wants India to open its milk market to American products. India won’t — imports would hurt millions of small dairy farmers, and no government wants that political cost.
### What did Piyush Goyal say about the deal?
On October 15, Goyal said the first tranche is “finalised… in legal drafting,” but India will implement it only if it gets a competitive advantage over peer countries like Bangladesh, Vietnam, and Indonesia.
### When is Marco Rubio visiting India?
This week. He’s skipping Delhi and focusing on Mumbai (investment) and Jamnagar (Mukesh Ambani’s refining complex, the world’s largest) — an energy-and-money itinerary.
The next marker is Rubio’s visit this week — and whether dairy, the issue that has outlasted every deadline, finally gets a formula both capitals can sell back home.
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