India-NZ FTA Talks Stalled by Dairy Market Access Issues

India and New Zealand have initiated their second round of Free Trade Agreement (FTA) discussions aimed at exponentially boosting bilateral trade over the next decade. Yet, these talks have encountered a major impediment: New Zealand's demand for more access to India's expansive dairy markets. India's steadfast stance on guarding its dairy sector— a crucial component of its rural economy— by limiting dairy imports has been a consistent feature of its trade policy, which has stalled progress in previous FTA negotiations, including those with the UK and US.

Currently, India's dairy imports from New Zealand are minimal, amounting to about $0.57 million, and while there may be some room for discussions about importing value-added dairy products, India resolutely opposes opening its market to raw dairy imports to protect local dairy farmers. The outcome of these talks will have far-reaching consequences not just for these two nations but could also set a precedent for future global dairy trade and negotiations.