India Shields Farmers And Key Sectors In Free Trade Agreement With New Zealand

Authorities have decided not to extend import duty concessions to New Zealand for sensitive sectors, including dairy, vegetables, sugar, copper, and aluminium, under the Free Trade Agreement to be signed within three months. Officials noted the move aims to protect domestic farmers and micro, small, and medium enterprises (MSMEs).

Negotiators confirmed on Monday that they have concluded FTA discussions and will implement the agreement next year.

Provisions in the pact maintain a detailed exclusion list to safeguard key domestic sectors. The list covers dairy products such as milk, cream, whey, yoghurt, and cheese, alongside other animal products except sheep meat.

Vegetables, including onions, chana, peas, corn, and almonds, are also included in the exclusion list. Sugar, artificial honey, and animal, vegetable, or microbial fats and oils remain outside the concessions.

The Indian government also excludes non-agricultural items, including arms and ammunition, gems and jewellery, copper products such as cathodes, cartridges, rods, bars, and coils, and aluminium items, including ingots, billets, and wire bars, from the FTA concessions.

Restricted Access for Select Agricultural Goods

India has agreed to provide limited market access for certain agricultural products under tariff rate quotas (TRQs) and minimum import prices (MIPs). This covers Manuka honey, apples, kiwi fruit, and albumins—including milk albumin, widely used in medicines and whey protein production.

Currently, India applies a 66 per cent duty on Manuka honey, importing 14.2 tonnes from New Zealand and 356.8 tonnes globally.

The FTA allows duty-free imports of up to 200 tonnes annually at a MIP of USD 20/kg, with a 75 per cent tariff reduction phased over five years. Imports beyond this quota will face a MIP of USD 30/kg.

Apple imports, currently taxed at 50 per cent, total 31,393 tonnes from New Zealand and 519,652 tonnes globally.

The FTA allows duty concessions for 32,500 tonnes in the first year, rising to 45,000 tonnes by year six at 25 per cent duty and MIP of USD 1.25/kg. Volumes above the quota will attract the standard 50 per cent duty.

Kiwi fruit, currently taxed at 33 per cent, will have a TRQ of 6,250 tonnes in year one, increasing to 15,000 tonnes by the sixth year at zero duty, with a MIP of USD 1.80/kg. Imports exceeding this limit will face a 50 per cent duty and a MIP of USD 2.50/kg.

Exports of albumins, including milk albumin, currently attract a 22 per cent duty. New Zealand sends 3,430 tonnes to India while global imports total 18,801 tonnes.

The FTA sets a TRQ of 1,000 tonnes in the first year, rising to 3,000 tonnes by the fifth year, after which standard duties will apply.

Officials stated the agreement balances market access with safeguards for domestic industries, opening trade opportunities while protecting farmers and MSMEs.

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