The concluded India–New Zealand free trade agreement includes a tightly ring-fenced investment arrangement that will allow New Zealand firms to process dairy inputs in India exclusively for re-export, while keeping India’s domestic dairy market fully protected, Commerce and Industry Minister Piyush Goyal said on Monday, PTI reported.Under the arrangement, firms from New Zealand can bring dairy raw materials or ingredients into India, process them into value-added products, and export 100 per cent of the output overseas, Goyal told reporters in New Delhi.
“That will be (done) through a fast-track mechanism. So we would like to fast-track investments coming in for the purpose of re-exports,” the minister said.Also read:‘Neither free nor fair’: New Zealand’s foreign minister Winston Peters opposes FTA with India; cites tariffs on dairyAccording to officials, the fast-track route will apply only to manufacturing units producing goods meant solely for export, ensuring there is no spillover into the domestic market and no adverse impact on Indian dairy producers.“We have done an agreement to promote greater investments that they (New Zealand) should bring here raw materials or ingredients to India, process them and make high-quality dairy products in India, and 100 per cent will be re-exported from India,” Goyal said.The minister reiterated that India has not offered, and will not offer, any duty concessions on dairy imports under the pact. The dairy sector remains outside the scope of the FTA, which is scheduled to be implemented next year.Goyal underlined that India has “never” opened the dairy sector in any of its trade agreements and will “never” do so in the future, given the sector’s sensitivity and its importance to millions of small farmers.Addressing questions on a side letter attached to the agreement that provides for consultations on dairy during future reviews, Goyal said the provision was included at New Zealand’s request and carries no binding commitment.He explained that New Zealand had sought assurances that if India were ever to open its dairy sector to another comparable economy — defined by similar per capita GDP, economic size and dairy production levels — it would at least have the opportunity for consultations.“You all know that we have not opened dairy in any FTAs for anybody … India is never going to open up dairy, so that concern really does not matter. It’s (side letter) only a consultation, no commitment,” Goyal said.India has consistently resisted opening the door to bulk dairy imports in all past trade negotiations, treating the sector as a red-line issue due to its political and economic sensitivity.New Zealand, one of the world’s largest dairy exporters, has limited dairy trade with India at present. Its dairy exports to India in FY2025 stood at just $1.07 million, including milk and cream worth $0.40 million, natural honey worth $0.32 million, mozzarella cheese worth $0.18 million, butter worth $0.09 million and skimmed milk worth $0.08 million.
