Under the framework, New Zealand firms will be permitted to bring in specific dairy inputs, process them in Indian facilities, and ship the finished products to third-country markets. These products cannot be sold within India, ensuring that local milk producers and cooperatives are insulated from foreign competition.

The government has emphasized that India’s dairy sector — which supports millions of small and marginal farmers — remains outside the scope of tariff liberalization. Goyal reiterated that there would be no dilution of India’s existing dairy safeguards, a consistent position India has taken in all trade negotiations.

From a trade perspective, the arrangement is positioned as a way to strengthen India’s role as a processing and value-addition hub, leveraging manufacturing capacity, labor availability and logistics advantages while supporting export-oriented growth without disrupting domestic supply chains.