The India-New Zealand trade deal, which has yet to be signed, promises to reshape the global dairy market, opening up new opportunities for New Zealand, but putting local dairy farmers in India at risk. Here, we look at how the pact could transform global dairy production and marketing.
This agreement, which lowers tariff barriers for New Zealand dairy products, is having a significant impact on the global market. While it offers new opportunities for New Zealand, it also poses challenges for Indian dairy farmers, who could be affected by increased foreign competition. Below, we explore how this pact is reshaping dairy trade and its repercussions globally.
The opening of the Indian market represents a key opportunity for New Zealand dairy products in the world’s largest dairy consuming country. By reducing tariffs on New Zealand imports, the agreement facilitates their access to the Indian market and gives them a competitive advantage in terms of price.
New Zealand, with its strong dairy industry, sees in this agreement an opportunity to increase its exports, especially in products such as milk powder and butter, where it has a competitive advantage. This allows it to enter a market that, due to historical tariff barriers, has so far been closed to it. For New Zealand, the pact represents a strategic expansion that could further consolidate its position as one of the world’s leading exporters of dairy products.
However, the opening of the Indian market to foreign dairy products puts the stability of India’s small dairy farmers at risk. Already facing difficulties due to low mechanisation, low yields and high production costs, they could see milk prices fall in the face of competition from imported products from New Zealand. This would not only affect their profitability, but also the millions of people who depend on milk as their main source of income.
This agreement is only the beginning of what could be a profound transformation in the global dairy market. Its impact will be key to understanding future industry dynamics. While the opportunities for New Zealand are clear, it is crucial that India’s trade policies consider the needs of its local producers to avoid being crowded out by international competition and to ensure food security at home.
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