Image: Zero duty to hit Indian dairy industry amul
Image Source:

The Indian dairy sector, providing livelihood to 15 crore farmers, would be severely hit if import duties on milk and milk products were eliminated under any Free Trade Agreement (FTA) including the Regional Comprehensive Economic Partnership (RCEP), according to the local dairy cooperative Amul.

Separately, farmers’ organisations have threatened to hold nationwide protests if the dairy sector is opened up under the RCEP – the proposed mega-regional FTA involving 16 Asia-Pacific nations including India – or any other FTA including those proposed separately with Australia or New Zealand.

Also read: Forum concerned at ‘secret’ RCEP talks

Zero duty or reduced import duty under any FTA will risk the indigenous dairy industry due to influx of cheaper dairy products, particularly from RCEP members like Australia and New Zealand. Currently, the duty on milk and milk products ranges from 40% to 60%, which gives the local industry enough protection to build its competitiveness.

Australia and New Zealand control more than 35% of the global dairy trade and more than 50% of the intra-RCEP trade.

About Regional Comprehensive Economic Partnership (RCEP):

To read in detail about RCEP and its pros and cons for our country, read this: About RCEP.

RCEP is a proposed free-trade FTA b/w the ten member states of the Association of South East Asian Nations (ASEAN) and the six states with which ASEAN has existing free trade agreements.

Image: RCEP member countries infographics

RCEP was set up in November 2012 in Cambodia.

Cumulatively, the grouping of 16 nations include more than 3 billion people and has a combined GDP of $17 trillion. It accounts for about 40% of world trade.



The Hindu Newspaper (You can download it for free from a link given on this FB page – UPSC Aspirants Forum)