The dairy sector was completely protected in the FTA between India and New Zealand. Union Minister Piyush Goyal said no duty-free access will be given, so as to protect the interests of farmers and domestic producers.
Piyush Goyal: The dairy sector has been completely protected in the recent bilateral Free Trade Agreement (FTA) between India and New Zealand. Union Commerce and Industry Minister Piyush Goyal made it clear that India will never compromise against the interests of its dairy producers. This zone is ‘red line’ for India and no duty-free access is granted.
Objective and main benefits of FTA
Under the India-New Zealand FTA, both the countries have announced cooperation in many sectors to promote trade. India will get duty-free access to the New Zealand market, while New Zealand will benefit from reduction or removal of tariffs on 95 percent of the products. The objective of this agreement is to accelerate employment generation, skill development and investment led growth. Along with this, participation of small and medium enterprises (MSMEs) will be increased and innovation in agricultural productivity will be encouraged.
Piyush Goyal said that this FTA will boost trade as well as create new opportunities for farmers, entrepreneurs, students, women and innovators. This will help in improving agricultural productivity and increasing the income of farmers.
Limited access to dairy and agricultural products
Apart from the dairy sector, some sensitive agricultural products have also been restricted in the FTA. This includes dairy, coffee, milk, cream, cheese, curd, whey, casein, onion, sugar, spices, edible oil and rubber. No duty-free access is granted on these products.
However, for some products like apple, kiwi and honey, partnership has been done through productivity centres. In this, limited market access, minimum import prices and quotas have been implemented, so that domestic producers can be protected and knowledge can also be exchanged.
India has always adopted a strict stance on dairy imports
India has long been adopting a tough stance to protect its dairy sector from foreign competition. India has previously placed limits on bulk dairy imports in trade agreements, PTI reported. The dairy sector is considered politically and economically sensitive as it employs millions of small farmers and their livelihoods are directly dependent on this sector.
New Zealand is among the world’s largest dairy exporters, while India is one of the world’s largest milk producing countries. Despite this, dairy trade between the two countries is currently limited. The total import of dairy products from New Zealand to India in the financial year 2024-25 stood at about $ 1.07 million. In this, import of milk and cream was 0.40 million dollars, natural honey 0.32 million dollars, mozzarella cheese 0.18 million dollars, butter 0.09 million dollars and skimmed milk 0.08 million dollars.
Historical significance of the agreement
Formal FTA negotiations between India and New Zealand began on 16 March 2025. After this, the agreement was finalized after five rounds of talks. Both countries ensured that sensitive sectors are protected and trade and investment-led growth is promoted.
Indian MSMEs, startups and innovators will get new opportunities in New Zealand through FTA. Also, emphasis will be placed on innovation and skill development to strengthen economic stability in the long term.
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