New Delhi: India has categorically refused to offer any import duty concessions on dairy products to New Zealand under the recently concluded bilateral free trade agreement, reinforcing its long-standing position on protecting the sensitive sector.
“The dairy sector is completely a red line for us. No duty concessions under the pact in the sector,” a government official said, shortly after both sides confirmed the conclusion of negotiations covering a wide range of goods and services — with dairy explicitly excluded.
India has consistently kept dairy outside the scope of its free trade agreements, citing the sector’s critical role in rural livelihoods. Unlike capital-intensive dairy industries abroad, India’s dairy ecosystem is sustained by millions of small and marginal farmers, for whom milk production is a key source of daily income. Any large-scale import liberalisation, policymakers argue, could severely disrupt this fragile socio-economic structure.
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New Zealand, one of the world’s largest exporters of milk and dairy products, has long pushed for greater access to the Indian market. However, India has maintained that opening up the sector is politically and economically non-negotiable, given its implications for farmer incomes and cooperative institutions such as AMUL and state federations.
Despite repeated demands, actual dairy trade between the two countries remains marginal. In FY2025, New Zealand’s dairy exports to India stood at just USD 1.07 million. This included milk and cream worth USD 0.40 million, natural honey valued at USD 0.32 million, mozzarella cheese at USD 0.18 million, butter at USD 0.09 million, and skimmed milk powder amounting to USD 0.08 million.
Trade analysts note that while dairy remains off the table, the broader agreement is expected to deepen cooperation in non-sensitive sectors. Still, India’s firm stance sends a clear signal: when it comes to dairy, market access will not come at the cost of domestic farmer security.
In plain terms, New Zealand may have secured a trade deal — but India’s dairy farmers remain firmly shielded.
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