India has granted a quota-based duty concession to the United States on 5 lakh tonnes of Dried Distillers' Grains with Solubles (DDGS) as part of the first phase of a bilateral trade agreement. This quantity represents approximately 1% of India's total DDGS consumption. The move is intended to supplement domestic feed availability and address rising demand without diverting food grains for human consumption.
DDGS, a byproduct of corn ethanol production, is a high-protein animal feed. According to Commerce and Industry Minister Piyush Goyal, the animal husbandry and poultry industries in India desire DDGS due to its high nutritional value, which can lead to healthier poultry.
The duty concession aims to reduce the need for corn and soybean imports for feed purposes. Access to DDGS is expected to stabilize feed costs, benefiting poultry, dairy, aquaculture, and livestock producers while helping to control food inflation. It should also ease pressure on domestic corn and soybean markets, ensuring the availability and affordability of staple food grains.
India's demand for animal products is rapidly increasing due to population growth, rising incomes, and urbanization. This surge has driven up demand for animal feed, particularly corn (200 lakh tonnes), wheat (65 lakh tonnes), and soybean meal (62 lakh tonnes), which collectively account for nearly two-thirds of the country's total feed consumption of 500 lakh tonnes.
Domestic feed supply faces constraints due to limited arable land and productivity gaps. Projections suggest that feed demand will outpace domestic supply, necessitating imports by the early 2030s. In this context, the 5 lakh tonne DDGS import quota is viewed as a pragmatic and low-risk measure. It diversifies imports from the U.S. in small quantities, supports livestock sector growth, stabilizes prices, and aligns with national food security and export objectives.
The US Grains and Bioproducts Council notes that DDGS is a nutrient-rich co-product of dry-milled ethanol production with well-documented benefits as an energy and protein supplement in animal feed. US ethanol plants have a capacity to produce over 15 billion gallons of ethanol and 44 million metric tonnes of DDGS. The council has played a key role in promoting the nutritional advantages of DDGS worldwide.
Under the trade agreement, the U.S. is set to reduce tariffs on certain Indian goods from 50% to 18% in return for India eliminating non-tariff barriers and reducing tariffs on specific U.S. goods to 0 percent. Besides DDGS, the agreement covers tree nuts (almonds, walnuts, and pistachios), red sorghum, fresh and processed fruits (apples and oranges), berries (blueberries and cranberries), soybean oil (quota-based), and wine and spirits.