India-New Zealand FTA: Dairy Opportunities and Export Potential
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India-new Zealand FTA: New Zealand Gains Access to Process and export Dairy Products
Table of Contents
The India-New Zealand Free Trade Agreement (FTA) allows New Zealand firms to import dairy inputs, process them in India, and re-export 100% of the finished products.This arrangement is expected to boost trade and investment between the two countries.
Published December 22, 2023, 20:53:02
Overview of the India-New Zealand FTA
The India-New Zealand FTA, which came into force on november 23, 2022, aims to considerably boost bilateral trade. A key component of the agreement, as highlighted by India’s Commerce and Industry Minister Piyush Goyal, is the provision allowing New Zealand companies to leverage India’s manufacturing capabilities for value addition in the dairy sector. The Economic Times reported on this specific aspect of the agreement.
Dairy Sector Specifics
New Zealand is a major global dairy producer, and this FTA provides a pathway for its companies to access the growing indian market. The arrangement allows for the import of dairy ingredients – such as milk powder,butter,and cheese - for processing into finished products like infant formula,yogurt,and other value-added dairy items. These products can then be re-exported without facing significant tariffs.
This is particularly significant as India’s domestic dairy production, while substantial, ofen focuses on liquid milk and traditional products. The FTA facilitates the introduction of more refined, processed dairy products to the Indian consumer base.
| Country | Milk Production (2022) | Per Capita GDP (2022) |
|---|---|---|
| new Zealand | 21.3 million tonnes | $48,950 (USD) |
| India | 230 million tonnes | $2,388 (USD) |
Investment Arrangement Details
The investment arrangement within the FTA is crucial.It allows New Zealand firms to establish processing facilities in India, creating local employment and contributing to the growth of India’s food processing industry. The 100% re-export provision incentivizes investment by ensuring that companies can capitalize on global demand for processed dairy products.
A comparable economy,in terms of per capita GDP,size of the economy,and dairy production levels,would be useful for benchmarking the potential impact of this arrangement. However,finding a perfect comparison is challenging given the unique characteristics of both India and New Zealand.
Potential Benefits and concerns
Benefits: