Won’t say cheese: Dairy business frowns as FTA with EU nears closure

After efficiently blocking milk product imports from New Zealand and Australia beneath the Regional Comprehensive Economic Partnership (RCEP) settlement, the Indian dairy business is mounting related strain vis-à-vis a free commerce cope with the European Union (EU).
“They want to include dairy in the India-EU free trade agreement (FTA), which we are strongly resisting. When import of cheese, ice-cream, yogurt and whey is already allowed at 30% duty, butter/milk fat at 40% and milk powder at 60%, why should we further open up our market? Even in milk powder, the basic duty is 15% on imports of up to 10,000 tonnes a year, with only quantities beyond that attracting 60%,” a prime home dairy business supply advised The Indian Express.
The Commerce Ministry has been holding stakeholders’ consultations relating to the India-EU FTA that’s within the ultimate levels of negotiation. Dairy and vehicles are the 2 industries the place the EU is seemingly searching for larger market entry. Car imports presently entice a normal obligation of 60%, whereas it’s 100% for automobiles with petrol/diesel engine capability exceeding 2,500-3,000 cc. An FTA — which the home auto business can be lobbying towards — could entail substantial obligation cuts for a specified variety of automobiles imported from the area.
“In dairy, the proposal is for duty concessions on so-called high-end products like cheese. But why extend these to elite consumers at the expense of our farmers? Cheese imports are anyway permitted sans any restrictions at 30% duty,” the earlier-quoted business supply stated.
India’s organised cheese market is estimated at 60,000-70,000 tonnes and value Rs 1,800-2,100 crore at a median processor realisation of Rs 300/kg. Roughly three-fourths of that is marketed in client packs and the remainder offered to industrial shoppers like Domino’s Pizza, KFC/Pizza Hut and McDonald’s.
“Our domestic production capacity is now roughly one lakh tonnes (lt) per year. With mozzarella cheese being identified for support under the Narendra Modi government’s production-linked incentive scheme to boost exports, the capacity will go up by another 50%. Allowing more imports goes against the government’s own policy objective,” the supply claimed.
India imports round 3,000 tonnes of principally connoisseur cheese yearly. But the concern is of large-scale imports as soon as the market is absolutely opened up: EU is the world’s largest producer (103.5 lt out of a complete 212.22 lt in 2020) in addition to exporter (9.31 lt out of 21.62 lt) of cheese.
India, in November 2019, opted out of becoming a member of RCEP, citing considerations over the opposed influence of unfettered imports from China, New Zealand, Australia, the ASEAN international locations, South Korea and Japan that signed as much as the 15-country FTA. The dairy business, particularly, raised the alarm about New Zealand and Australia flooding the Indian market with low cost milk powder and butter.

With the EU, the perceived menace is extra from cheese, the place the home market has grown in the previous couple of years primarily on the again of rising pizza consumption.
“The EU, unlike New Zealand and Australia, heavily subsidises farmers, enabling their dairy products to be dumped at low rates once market access is granted. At the same time, they erect non-tariff barriers making it impossible to export our products to their markets. We should keep these facts in mind while negotiating any FTA relating to agricultural products,” the business supply added.