NZ-India free trade talks facing dairy dilemma

However, in the first instance such exports may not feature commodities like whole milk powder, rather more sophisticated dairy products such as ingredients and items for the food service sector.

Following the recent trade mission led by Prime Minister Christopher Luxon, the Government has launched a period of public consultation to get feedback from businesses, NGOs and members of the public on what should be included in the negotiations.

Trade Minister Todd McClay, who's been to India five times since becoming Minister, says with a population of 1.4 billion people, India holds significant potential for NZ and adds it will play a pivotal role in the Government's goal to double NZ's exports by value over the next 10 years.

India is the world's largest milk producer, accounting for 24% of global milk production. It does however import a small amount of dairy products, buying $50m worth of products from NZ, making up 13% of total Indian imports.

The issue of including dairy in an FTA is seen by some commentators as very challenging, but Kimberly Crewther, the executive director of the Dairy Companies Association of NZ (DCANZ) sees opportunities to export some dairy items that would benefit both countries.

She says the fact that negotiations have been launched with the aim of any FTA being 'comprehensive' is a positive sing. Crewther says there are a range of areas in the dairy sector where the two counties could work positively together, some of which are outside trade such as animal health and biosecurity.

"Both of our countries have deep interests in that space, so there is a lot we can do together to advance the work we are doing jointly."

Products On Offer

Kimberly Crewther says NZ produces some 1500 different dairy products and specifications and it's some of these that India may find attractive to import.

"We are talking about dairy ingredients; products that go through to support further food manufacturing or food service applications which can have mutual benefits in terms of economic development," she told Rural News.

"The supply of NZ ingredients can help create new businesses, job creation and economic activities within that market," she says.

For decades, the NZ dairy sector has faced opposition and restrictions when it comes to obtaining FTAs with many countries. The EU, Britain, Ireland, Korea, Japan, Canada, and China - the list is long because these countries have many small dairy farms and dairy farmers with significant political power, which governments can't afford to ignore.

Despite this, Crewhter says NZ has been smart around the negotiating table.