FTA to allow New Zealand firms to process dairy inputs in India for re-export: Piyush Goyal

New Delhi, Dec 22 (PTI) The concluded India-New Zealand free trade pact has an investment arrangement under which firms from the Oceania country can bring raw materials or ingredients from the dairy sector into India, process them to make high-quality products and then re-export 100 per cent of those goods, Commerce and Industry Minister Piyush Goyal said on Monday.

The arrangement, he said, will help India increase exports to New Zealand and other parts of the world.

"That will be (done) through a fast-track mechanism. So we would like to fast-track investments coming in for the purpose of re-exports," the minister told reporters here.

These dedicated fast-track arrangements will be used exclusively for the manufacture of products destined solely for export, thereby safeguarding the interests of the domestic industry, an official said.

"We have done an agreement to promote greater investments that they (New Zealand) should bring here raw materials or ingredients to India, process them and make high-quality dairy products in India, and 100 per cent will be re-exported from India," Goyal said.

In general, India has not given any duty concessions on the import of dairy goods and the sector is out of the purview of the agreement, which will be implemented next year.

The minister has made it crystal clear that India has "never" given any duty concessions in the dairy sector in any of its previous trade pacts and it will "never" open the segment in future also.

When asked about the reason for the inclusion of a side letter in the FTA providing for consultations on the dairy sector during a review of the pact, he said the New Zealand side was concerned that if India opens the segment in future for another comparable economy, then at least it should have an opportunity to discuss with India the extension of similar benefits to it.

A comparable economy is one where the per capita GDP, the size of the economy, and the dairy production level are similar to those of New Zealand.

"You all know that we have not opened dairy in any FTAs for anybody ... India is never going to open up dairy, so that concern really does not matter. It's (side letter) only a consultation, no commitment," he added.

India has always resisted opening the door to bulk dairy imports in all of its previous pacts. Dairy has long been the most sensitive and politically charged issue in the negotiations.

New Zealand is one of the world's largest dairy exporters, while India is home to millions of small dairy farmers for whom market protection is a red-line issue. In practice, however, current trade is minimal.

New Zealand's dairy exports to India in FY2025 totalled just USD 1.07 million, consisting of milk and cream ( USD 0.40 million), natural honey (USD 0.32 million), mozzarella cheese (USD 0.18 million), butter (USD 0.09 million) and skimmed milk (USD 0.08 million). PTI RR MR