India caps US duty concession on DDGS at 5 lakh tonnes under trade pact

India has extended a quota-based duty concession on imports of dried distillers’ grains (DDGS) limited to 5 lakh tonnes, just one per cent of the country’s total consumption under the first phase of the bilateral trade agreement, an official said.

The official noted that DDGS imports are intended to supplement domestic animal feed supplies and help meet rising demand without diverting food grains meant for human consumption.

“Domestic animal feed consumption is around 500 lakh tonnes, while the quota granted to the US is only 5 lakh tonnes, which works out to just 1% of total consumption,” the official said. He added that importing DDGS would help reduce the need for corn and soybean imports used for feed.

Greater access to DDGS is expected to lower volatility in feed costs, offering relief to poultry, dairy, aquaculture and livestock producers, while also helping to contain food inflation.

The imports are also expected to ease pressure on domestic corn and soybean markets, thereby supporting the availability and affordability of staple food grains.

”India’s feed demand growth is large, structural and long-term. Only 1 per cent quota of DDGS imports is a pragmatic, low-risk measure. It diversifies small quantities of imports to the US, reduces corn and soyabean imports for feed, supports livestock growth, stabilises prices, and aligns with national food security and export objectives,” it added.

India’s demand for animal products is increasing rapidly due to population growth, rising incomes, and urbanisation.

This has led to a corresponding increase in demand for animal feed, particularly corn (200 lakh tonnes) and wheat (65 lakh tonnes) soybean meal (62 lakh tonnes), which together account for nearly two-thirds of total feed consumption (500 lakh tonnes).

Domestic feed supply is increasingly constrained by limited arable land and productivity gaps.

Feed demand is projected to grow faster than domestic supply, making imports necessary by the early 2030s under all realistic growth scenarios.

India imported soybean meal (15 lakh ton) in 2021 due to domestic price pressures.

Currently imports more than 6 lakh tonnes of animal feed (key suppliers- Sri Lanka, China, USA, Thailand, Nepal), 6 lakh tonnes of soyabean (key suppliers- Niger, Togo, Benin, Mozambique) and 9 lakh tonnes of corn (key suppliers- Myanmar, Ukraine, Singapore, UAE).

With inputs from agencies