India has decided not to extend import duty concessions to New Zealand on several sensitive agricultural sectors, including dairy, vegetables and sugar, as part of the proposed India–New Zealand Free Trade Agreement (FTA), in a move aimed at safeguarding the interests of domestic farmers and micro, small and medium enterprises (MSMEs).
The two countries announced the conclusion of negotiations for the FTA on Monday. The agreement is expected to be signed within the next three months and implemented sometime next year.
According to officials, products placed on India’s exclusion list include dairy items such as milk, cream, whey, yoghurt and cheese; animal products (other than sheep meat); vegetable products including onions, chana, peas, corn and almonds; sugar; artificial honey; and animal, vegetable or microbial fats and oils. These categories will not receive any import duty concessions under the pact.
While protecting sensitive sectors, India has agreed to provide calibrated market access to New Zealand for select agricultural products through tariff rate quotas (TRQs) combined with minimum import prices (MIPs), ensuring that domestic markets are not disrupted.
Manuka honey, a niche New Zealand product that currently attracts a 66 per cent import duty, will be allowed concessional access up to 200 tonnes per annum with an MIP of USD 20 per kg. A 75 per cent tariff reduction will be phased in over five years. Imports beyond this quota will face a higher MIP of USD 30 per kg. India currently imports 14.2 tonnes of Manuka honey from New Zealand, compared with 356.8 tonnes from global markets.
In the case of apples, which currently attract a 50 per cent duty, India will allow duty concessions for 32,500 tonnes in the first year of the agreement. This quota will gradually increase to 45,000 tonnes by the sixth year, with the duty reduced to 25 per cent and an MIP of USD 1.25 per kg. Imports beyond the quota will continue to attract a 50 per cent duty. At present, India imports about 31,392 tonnes of apples from New Zealand annually.
For kiwi fruit, which currently faces a 33 per cent duty, a TRQ of 6,250 tonnes will be permitted in the first year, rising to 15,000 tonnes by the sixth year at zero duty, subject to an MIP of USD 1.80 per kg. Beyond this limit, a 50 per cent margin of preference will apply with an MIP of USD 2.50 per kg.
India has also agreed to limited concessions for albumins, including milk albumin used in pharmaceuticals and whey protein manufacturing. The current import duty of 22 per cent will apply beyond the TRQ, which starts at 1,000 tonnes in the first year and increases to 3,000 tonnes by the fifth year.
Officials said the structure of the agreement reflects India’s attempt to strike a balance between expanding bilateral trade ties with New Zealand and protecting vulnerable domestic sectors from import surges.