India threatened walk outs over NZ's push for dairy - top negotiator
Thursday, 14 May 2026
The country’s top trade official Vangelis Vitalis says India threatened walkouts over New Zealand’s push for dairy gains during free trade agreement (FTA) negotiations.
NZ First leader Winston Peters has argued the FTA is a bad deal that gives too much away in areas like immigration for not enough in return for areas like dairy.
The Ministry of Foreign Affairs and Trade (Mfat) Deputy Secretary Vangelis Vitalis told MPs at a Select Committee on Thursday morning negotiations were so hard fought on dairy that India almost left the table.
“This was the big disappointment of the agreement and there is no way around it. On the orthodox elements that we would normally consider part of an agreement - butter, cheese, milk powders - India flatly refused to even engage with us.
“There were moments when there were threatened walkouts, including at ministerial level, when we persisted in seeking an outcome for dairy.”
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Vitalis was at pains to point out that New Zealand was not alone in its position - and had made progress in some areas that shouldn’t be overlooked.
“It is the case that this agreement does not include those classical elements - butter, cheese, skim milk powder. It is also the case that no other country has secured access in any of those products either.”
“What we have secured is tariff elimination for bulk infant formula, for peptones, which is an ingredient that you’d use for protein shakes and probiotic drinks and so on, and also for albumins.
“These were things that were resolved right at the end of the negotiation. They were extremely difficult but they are significant for us, that we at least got a measure of access.”
Speaking to reporters on Thursday afternoon, Peters said the comments were “astonishing”.
“What was even worse was the lack of sensible questions being asked by the Select Committee. Get off their backside and do their job properly. I wish I was on that Select Committee. He wouldn’t be giving those sort of answers.”
Peters said he had travelled to India and spoken to people in its dairy industry. He said he believed better dairy access could be achieved with more time.
“I knew it would take years for us to get on their side but they went about it, in my view, the wrong way.
“We could prove to the Indians that we had a capacity to dramatically improve their production because of our breeding skills and our knowledge but we never got a chance to do that because a promise was made to get a deal done in less than three years and ended up done in 21 months and that's a consequence. It is not a good deal.”
Vitalis was grilled about what would happen if India thought New Zealand had not fulfilled part of its side of the deal to promote [foreign direct investment] from New Zealand investors into India with the aim of hitting US$20 b within 15 years of it coming into force.
He said this section of the FTA makes it clear New Zealand had promised to promote that level of investment, not actually spend it.
“So the commitment, which was very carefully drafted working closely with our Indian colleagues so it’s well understood, is to promote investment. It is not to reach the target.
“We have to, in good faith and as a serious partner, show and demonstrate to India that we are promoting investment there but it is clear that the New Zealand government cannot give or invest US$20b - or NZ$34b
Vitalis said if in 15 years time India decided New Zealand hadn’t sufficiently promoted investment, it would indicate a critical breakdown in the relationship.
“If we’d fulfilled our obligations in a serious way, as we would as a serious country, I do not believe that that will be a situation we would face.”
“If we were in that situation then more fundamentally the bilateral relationship with India is in serious trouble. If they would ignore a very serious commitment that we are making to promote investment into India…then I think we have a more fundamental problem.”
Vitalis was also asked about the FTA’s impact on immigration in light of Peters’ claim the deal risked a surge of Indian migrants.
He said there was no pathway to permanent residence or citizenship through the FTA’s temporary employment entry visa.
“There’s also a three year stand down. So after you’ve had your visa for three years you must leave and you cannot reapply for three years.
“So there are a number of important safeguards that have been put in place to manage and mitigate some of the challenges some of the challenges that [MPs] have identified.”