New Zealand’s dairy industry has highlighted major limitations in the India-New Zealand Free Trade Agreement (FTA), stating that the deal offers limited gains for dairy exporters despite broader benefits for other sectors. According to submissions made by the Dairy Companies Association of New Zealand (DCANZ) to Parliament’s select committee, the side agreement linked to the FTA allows future tariff renegotiations only if India grants better dairy access to another “comparable” dairy-exporting country under a full trade agreement recognised by World Trade Organization rules.
However, DCANZ noted that key dairy categories including infant formula, casein and high-value whey products are excluded from renegotiation mechanisms, even though India has already reduced or eliminated tariffs on some of these products in agreements with Australia and the United Kingdom.
DCANZ also raised concerns that many modern trade arrangements pursued globally, especially by the United States, may not qualify under the narrow WTO-linked trigger conditions outlined in the agreement. Industry representatives further warned that India’s existing import-for-re-export scheme remains difficult to use because of regulatory complexities, creating uncertainty over whether New Zealand dairy exporters will benefit meaningfully from duty-free access for ingredients used in Indian food processing and re-export activities.
According to DCANZ, tariff reductions under the agreement currently apply to dairy product categories accounting for only 3.8% of New Zealand’s existing global dairy trade. Despite disappointment over the limited dairy market access, the association said it supports ratification of the agreement “on balance” due to broader economic benefits for other export sectors and hopes future annual and biennial reviews may improve dairy trade opportunities. India has consistently maintained that dairy remains a highly sensitive sector because of the livelihoods of nearly 80 million small and marginal dairy farmers dependent on the industry.
Source: Dairynews7x7 26 May, 2026 Read full story here