India Keeps Agriculture & Dairy Out of FTAs to Protect Farmers

India has recently signed a Free Trade Agreement (FTA) with New Zealand, following earlier pacts with Australia, the UK, the UAE, Oman and the European Free Trade Association, while deliberately excluding agriculture and dairy from these deals to safeguard domestic producers. The strategy reflects India’s cautious approach after withdrawing from the Regional Comprehensive Economic Partnership (RCEP), where concerns about competition with China and other economies had been central.

In both the Australia–India and New Zealand–India FTAs, New Delhi has kept sensitive sectors like agriculture and dairy outside tariff concessions and market access commitments. This means that milk, dairy products and key farm outputs are not opened to duty-free imports, thereby protecting the livelihoods of India’s vast farmer base — especially the estimated 80 million dairy farming households that depend on domestic dairy production.

The government’s stance has also been reinforced by official statements from Commerce Minister Piyush Goyal, who has repeatedly stated that India will never open up its dairy sector in FTAs and will protect farmers’ interests in any trade negotiation. Under the India–New Zealand FTA, dairy remains off-limits to imports, even as certain investment frameworks allow foreign firms to process dairy inputs in India for re-export.

This protectionist approach has drawn criticism from New Zealand’s political leadership, with some officials calling the pact “neither free nor fair” given the exclusion of New Zealand’s key dairy exports such as milk, cheese and butter. The exclusion underscores the political sensitivity of dairy liberalisation in India, where rural economic and social interests are deeply tied to the sector.

Overall, India’s strategy in recent FTAs reflects a deliberate balancing act: pursuing broader trade opportunities while ensuring that agriculture and dairy — seen as vital to food security and rural livelihood — remain protected from international competition.

Source : Dairynews7x7 Dec 29th 2025 The pioneer