New India–New Zealand Free Trade Agreement shields domestic dairy imports while opening other sectors, keeping small farmers at the center of policy.
India has excluded dairy products from duty-free access in its newly concluded Free Trade Agreement (FTA) with New Zealand, marking a firm stance to protect its domestic dairy industry from flood-gate imports of milk, cheese, whey, yoghurt and cream. The decision reflects long-standing political sensitivity around dairy liberalization in one of the world’s largest milk-producing countries.
According to the commerce ministry, the FTA’s market access carve-outs are designed to safeguard India’s roughly 80 million dairy farmers and small-scale producers. While the pact covers many goods and services, dairy remains on the exclusion list alongside other sensitive agriculture items like onions, sugar and edible oils, ensuring that tariff protections such as current duties remain in place.
India continues to impose substantial import tariffs on key dairy items — including 30% on milk, 40% on whey and 33% on cheese from New Zealand — as part of this protective approach. New Zealand’s dairy exports to India have historically been limited in scale, amounting to just over $1 million in FY2025, but the government is erring on the side of defence to prevent growth in import exposure.
The dairy exclusion has drawn criticism from New Zealand political figures, with some describing the agreement as “neither free nor fair” due to the lack of meaningful access for a sector that represents nearly 30% of New Zealand’s export economy. Wellington’s influential dairy industry — long seeking entry to India’s large consumer market — views the carve-out as a major frustration in broader bilateral trade ambitions.
Beyond dairy, the pact extends to a wide array of goods and services, and India’s government has positioned the deal as a way to strengthen technical collaboration and selective market access while defending sensitive sectors at home. For global dairy analysts and market strategists, the outcome underscores the complex balance between trade liberalization and domestic agricultural protection in major emerging markets.
Source: The New Indian Express — https://www.newindianexpress.com/business/2025/Dec/22/india-shields-sensitive-dairy-sector-from-nz-imports-2
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