Indian economy has traditionally been regarded as protectionist, with policies intended to shield local industry while exposing to healthy global competition. While some critics have argued that the approach suppresses growth and creativity, others argue that it is warranted because of the economic and social conditions in the country. The International Monetary Fund (IMF) projects India to grow at 6.4% in 2025, which clearly demonstrates the power and potential of India.
The protectionist policies have imposed a few non-tariff as well as tariff trade barriers, but not harmed the economy. Instead, India's growth story is one of incremental liberalization, with the government balancing to let in foreign investment while protecting national interest. The dairy sector is one such example, where India has not let itself be opened to foreign competition, lest it face the consequences on country-specific farmers and the rural economy.
The recent trade tensions with the United States have solidified India's protectionist stance. In the negotiations of the interim trade agreement, India did not acquiesce, rejecting proposals that accommodated American interests at the expense of Indian farmers and dairy farmers. The US had proposed allowing the entry of American dairy products, including non-vegetarian milk, which was seen as a threat to India's dairy industry. However, in the case of non-vegetarian milk, ethical considerations relating to religious sentiments is another important reason.
