But despite the three P challenge Alliance is committed to developing the India market.
“Farmers expect us to take a long-term view and if there’s one we need to be early into it’s this opportunity with India,” Taggart said.
Alliance chief executive David Surveyor, director Sarah Brown and Taggart have just returned from an in-market visit to India.
India is an emerging market prospect for Alliance. It has partnered New Zealand cricket celebrities Quality NZ there for several years.
“We certainly have a much better appreciation of how Quality NZ has developed that market and where to from here,” Taggart said.
“There’s certainly been good ground made over the past six years.
“But there is a lot of work to do before India will become a major market for NZ. It’s not an easy market to enter.
“It’s not going to become another China overnight but with its population and economic growth and the three Ps it’s certainly going to be a valuable market of the future.”
In-market developments are targeting the higher socio-economic category of more than 200 million people. It is expected to more than double in the next decade.
India is forecast to exceed China’s GDP by 2022.
While now a small value market, Alliance’s view is over the long term India has the potential to become a large consumer of the co-operative’s products, Taggart said.
Meat Industry Association chief executive Tim Ritchie said the Regional Comprehensive Economic Partnership (RCEP) has the potential to deliver new market access to India.
NZ doesn’t have any form of trade deal with India and this is an opportunity to address this.
“India will undoubtedly present major opportunities for NZ meat exporters, particularly sheep meat.
“Indian consumers have a positive attitude towards sheep and goat meat and this, combined with expected future growth in India’s population and average disposable incomes, and an increased demand for improved food quality are all factors that make the Indian market an attractive proposition,” Ritchie said.
But red meat faces very high tariffs of 35% to 100% for sheep meat and up to 100% for beef.
There are also some significant non-tariff barriers such as regulatory requirements that make India a challenging market.
“We understand that the RCEP negotiations are complex, not only due to the number and differing levels of development of participating countries but also due to differences over the levels of ambition in terms of outcomes.
“That said, RCEP has the potential to address trade barriers and further open up the region, including the Indian market,” Ritchie said.
