India and New Zealand’s newly signed Free Trade Agreement (FTA) is expected to create fresh opportunities across the nutrition, health food and dairy ingredients sector, while still protecting India’s highly sensitive domestic dairy industry. Signed on April 27, 2026, the agreement aims to strengthen bilateral trade, investment and market access between the two countries.
Under the agreement, India has granted tariff reductions on selected nutrition-related imports including Manuka honey, bulk infant formula, dairy-based preparations and peptones from New Zealand. Tariffs on New Zealand’s Manuka honey exports to India, currently at 66%, will gradually decline by 75% over five years, eventually reducing to 16.5%. India currently imports around 14.2 metric tonnes of Manuka honey worth US$300,000 directly from New Zealand and 356.8 metric tonnes worth US$1.9 million from other global markets. (NutraIngredients.com)
New Zealand-based Manuka honey company Comvita described the agreement as a “great opportunity,” stating that India could become a “very significant” future market due to rising health awareness, expanding middle-class consumption and growing demand for therapeutic nutrition products. The company plans a phased and targeted market entry strategy focusing initially on major urban centres such as Mumbai and Bengaluru.
The FTA also provides phased tariff reductions on bulk infant formula and selected dairy-based nutritional products over seven years. However, India has strategically kept major dairy categories such as milk powder, butter, cheese and mainstream dairy imports outside the agreement to safeguard domestic dairy farmers and cooperatives. Commerce Minister Piyush Goyal reiterated that India’s dairy market remains protected under the pact.
Industry experts believe the agreement could accelerate India’s premium nutrition and functional food market while creating opportunities for ingredient partnerships, export-oriented dairy processing and technology collaboration. At the same time, analysts note that India’s dairy industry remains cautious about long-term competitive pressure from New Zealand’s globally efficient dairy sector.
India-New Zealand bilateral merchandise trade reached approximately US$1.3 billion in FY2024-25, registering a sharp 49% year-on-year increase. Both countries now expect the agreement to deepen cooperation across food processing, agri-tech, nutrition innovation and investment flows over the coming years.
Source: Dairynews7x7 14 May, 2026 Read full story here
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