A free trade deal between New Zealand and India is in trouble, with the eighth round of negotiations stalling on dairy products, the Economic Times in India reports.
Prime Minister John Key has pushed hard for a deal, visiting India last year.
The Times said India’s commerce department told a negotiating team from New Zealand that it was yet to get approval to make any offers in the agriculture and dairy sectors.
«The New Zealand team was disappointed and nothing significant could happen at the meeting as its offers in areas important to New Delhi such as services is contingent upon what it gets in the farm and dairy sectors,» a government official told the Times.
New Zealand was also not happy with the safeguards India had proposed to guard its agriculture sector. Such measures would allow the country to increase import duties several times if there was a surge in imports.
«There is no way we could have made any offers in the dairy sector without taking in views of the agriculture and food ministries as it is a very sensitive sector,» the official said.
India has not given any significant concessions around dairy to any of its other free trade partners, including Singapore, Japan, South Korea, Sri Lanka and the Asean grouping.
The dairy industry, however, is central to New Zealand’s economy and it is not willing to seal its offer in services without commitments in the area.
The Times said the agreement is important for India as it hoped to get more work visas for its professionals especially teachers, healthcare providers, technicians, IT experts, architects and hospitality providers.
In a comment on the negotiations in Delhi, the New Zealand Ministry of Foreign Affairs says they discussed a range of subjects.
«Useful progress was made in a number of areas, but progress overall remains mixed,» the ministry said.
«The round was notable as the first opportunity for each delegation to question the other about their respective offers on services and movement of natural persons, which are of key interest to India.»
Negotiation briefing papers say agriculture is a significant sector for both New Zealand and India but currently the trade in agricultural products is limited.
They say the two sectors are largely complimentary and are not in competition.
New Zealand agricultural products were generally destined for the hotel restaurant trade, supermarket chains and niche markets.
«While New Zealand can be an efficient and safe supplier of food for India, it is too small to ‘flood’ a market of India’s size.»
India currently imposes heavy tariffs on agricultural products; sheep meat taxed over 35 percent, apples 51.5 percent and kiwifruit 30.9 percent.
«New Zealand is particularly concerned with the import tariffs on wine which reached 150 percent.»
In addition to tariffs, India levies additional import duties and state level taxes on many agricultural products.
«Reducing these duties and taxes would benefit both Indian producers and New Zealand exporters. Imports can have an important role in growing India’s markets.»
Source: Fairfax NZ News