July 15, 2025

 

India not accepting Australia's proposal for lower tariffs on dairy

 

 

India has rejected Australia's push for deeper tariff cuts on dairy and alcohol, hampering efforts to conclude the second phase of a trade pact by year-end, two Indian government sources said.

 

An interim trade pact signed in 2022 lowered tariffs on a range of goods, but negotiations on a broader Comprehensive Economic Cooperation Agreement (CECA) covering goods, services and visas have slowed, with dairy and wine emerging as key sticking points, the unnamed sources said.

 

India's refusal to concede on politically sensitive dairy and agriculture products reflects mounting pressure from powerful farm groups, which is also shaping trade talks with other partners, including the United States.

 

"There is no question of agreeing to Australia's demands for further tariff cuts on dairy and wine," a senior Indian official with direct knowledge of the talks with Australia told Reuters.

 

Australia is pushing to accelerate tariff cuts and gain better access for dairy products - including cheese, high- protein whey concentrate, lactose and processed items - currently taxed between 20% and 30%.

 

Karl Ellis of Dairy Australia said India's vast and culturally sensitive dairy sector limits mainstream exports, but niche products like high-protein whey, lactose, and select cheeses offer promise.

 

"Current tariffs are prohibitive," he said, adding lower duties could help Australia tap into the $30-40 million market now served by European exporters.

 

Despite the impasse, officials on both sides remain hopeful.

 

India is open to offer cutting tariffs on non-agricultural goods, including industrial items, while seeking more access for services and visas, a second official said.

 

- Reuters