India to sign FTA with New Zealand but excludes dairy, sugar, copper, aluminum, and vegetables to protect farmers and MSMEs.

Within the next three months, India will sign a free trade agreement (FTA) with New Zealand, but has chosen not to grant import tariff concessions for a number of sensitive industries, such as dairy, vegetables, sugar, copper, and aluminum. The action, according to officials, is intended to protect Indian farmers’ and MSMEs’ interests.

The two nations said on Monday that the FTA negotiations were finished, and the agreement is anticipated to go into effect next year.

Important domestic industries will be safeguarded under the agreement by a comprehensive exclusion list. Dairy items such milk, cream, whey, yoghurt, and cheese; vegetables like onions, chana, peas, corn, and almonds; animal products other than sheep meat; sugar and artificial honey; and fats and oils from animals, vegetables, or microbes are all included. Arms and ammunition, jewelry and gems, copper and its products (cathodes, cartridges, rods, bars, coils), and aluminum and its products (billets, wire bars, and ingots) are examples of non-agricultural industries that are not included.

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Under tariff rate quotas (TRQs) and minimum import prices (MIPs), India has also consented to grant limited market access for specific agricultural products. Apples, kiwis, Manuka honey, and albumins—including milk albumin, which is used extensively in the manufacturing of whey protein and medications—are examples of this.

356.8 tonnes (USD 1.9 million) of Manuka honey are imported worldwide, and 14.2 tonnes (USD 0.3 million) are imported from New Zealand, where 66 percent tariff is now applied. The FTA permits duty-free imports of up to 200 tonnes annually at a MIP of USD 20/kg, with a five-year phase-in of a 75% tariff reduction. The MIP will increase to USD 30/kg exceeding the quota.

India’s current tariff on apples is 50%. 5,19,652 tonnes (USD 424.6 million) are imported worldwide, whereas 31,393 tonnes (USD 32.4 million) are imported from New Zealand. Under the FTA, 32,500 tonnes of duty concessions will be granted in the first year, increasing to 45,000 tonnes by the sixth year at a duty rate of 25% and a MIP of USD 1.25/kg. If the volume exceeds the quota, a 50% duty will be applied.

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Kiwi fruit, which is now subject to 33% tax, will have a TRQ of 6,250 tonnes in the first year and 15,000 tonnes by the sixth year at zero duty, with a MIP of USD 1.80/kg. Beyond this limit, imports will be subject to a 50% margin of preference and a USD 2.50/kg MIP.

India imposes a 22 percent levy on albumins, including milk albumin. 3,430 tonnes (USD 28.9 million) are exported by New Zealand to India, whilst 18,801 tonnes (USD 175.3 million) are imported worldwide. Before the normal duty takes effect, the FTA permits a TRQ of 1,000 tons in the first year and 3,000 tonnes by the fifth.