http://en.wikipedia.org/wiki/Sacred_cow
The cow is sacred in Hinduism. To most Hindus in India, cows is respected as a mother since it gives milk. They will not eat beef even at risk of death through starvation.
Origin
This is limited to specific variants of the Hindu religion and came about because of governmental edicts that only the warrior caste, the kshatriya, may consume meat. Like many old laws and traditions, this was incorporated into religion.
For the cultural materialistic anthropologist Marvin Harris, the old Indian society practised animal sacrifices ending with the distribution of the meat. As population grew, this couldn't be supported and the religion changed to one with emphasis in love and peace instead of material rewards (this was contemporary with the rise of Zoroastrianism, Christianity and Buddhism). Cows were more needed for milk and labor than meat. Harris pointed that, during a famine, only a very strong taboo could keep a Hindu peasant from eating the animal that he would need next year.
A system developped where the pariah fed on dead cows and treat their leather. With the introduction of Islam, Muslims also entered this business.
Rambling cows also served as a social equalizer. A landless farmer could leave his cows wander and fed on the fields of the rich, who could not keep them away.
Studies showed that the substitution of work cows with mechanized farming would not be economically sound for India.
History
The cow taboo played a role in the Sepoy Mutiny. Hindu sepoys were told that the new bullets were greased with cow fat. Since gunloading required biting the bullet, the British Army was forcing them to break their religion.
Recent situation
It used to be illegal in India to kill a member of the genus Bos, but now, many slaughterhouses operate in big cities like Bombay/Mumbai or Kolkata/Calcutta. While there are approximately 3,600 slaughterhouses operating legally in India, there are estimated to be over 30,000 illegal slaughterhouses. The efforts to close them down have so far been largely unsuccessful.
The export trade in Indian leather is worth about $1.7 billion and India's export share of the leather market has been on the increase. Germany is the largest importer of Indian leather (19%) followed by the UK (17%).
Indian traffic codes give priority to cows.