Australian sheepmeat exports are still only trickling into India, two years after a free trade deal between the two countries, casting doubt on the expected gains for New Zealand sheep farmers should the government succeed in getting tariffs removed in its own renewed trade talks.
In Delhi this month, Prime Minister Christopher Luxon got the green light for negotiations to resume after a decade-long hiatus.
Luxon said he was confident of a deal before next year’s election.
Trade Minister Todd McClay said dairy market access talks would be tough but sounded more hopeful for sheepmeat.
McClay said Australian lamb exports to India had “grown significantly” since Australia’s 2022 free trade agreement reduced tariffs from 33% to zero.
“If we conclude an agreement with them I’ll get lamb [tariffs] to zero I reckon, and we’ll be able to compete against Australia,” McClay said.
Percentage increases aside, however, Australian sheep exports to India remain at very low levels.
According to Australia’s Department of Agriculture, Fisheries and Forestry, sheepmeat exports to India last year were just 250 tonnes. Lamb exports didn’t even crack 50t. Those totals compared to Australia’s total sheepmeat exports last year of 614,396t.
An executive at one major NZ meat exporter said India could not pay enough to compete with other international markets. Even with the removal of the 33% tariff on NZ sheepmeat , he did not see that situation changing.
“The fact is it is an extremely price-sensitive market,” the exporter said.
“Those guys will take you for your last five cents and Australia is a classic case.
“I mean they have sold 50t of lamb and 200t of mutton under a FTA with India.
“There is certainly no way I would be looking at India as a high-value market even with an FTA.”
A director of a major meat exporter in Delhi with Luxon and McClay said Australia’s struggles were partly explained by hold-ups with export plant licenses. These had only recently been resolved.
“That has been their big challenge but I think it is fair to say India is still pretty undeveloped for sheepmeat even at that high level.”
Exporter Alliance Group and in-market partner Quality NZ have spearheaded the industry’s attempts to gain a foothold for NZ lamb in India over the past decade. QNZ has sought to use the star power of its former Black Caps owners, such as Stephen Fleming and Brendon McCullum, to open doors in the cricket-mad country. However, official statistics show Alliance and QNZ have not been able to sell more than $2-3 million of sheepmeat per annum to India during that time.
A former Alliance board member said the tariffs had been a major factor in the slow growth in the market.
“It essentially restricts you to the five- and six-star hotel market and a few first-class airline kitchens.
“But the big barrier is actually logistics, as anyone who has tried to move food around India will tell you.
“The reason you have not seen Australian product flood in is you have got to somehow set up a supply chain that has integrity and that is what QNZ has done.”
Alliance’s global head of sales James McWilliam agreed.
“In terms of first-move advantage, QNZ is well set up once the tariff comes off.”
