Business Standard

India in no hurry to seal Russian dairy deal

Export council waiting for Commerce Ministry to approve draft proposal

Dilip Kumar Jha Mumbai
India seems to be in no hurry to sign a protocol with the Russian government to allow dairy products exports to that country.

Ahead of the scheduled meeting with Russian phytosanitary authority Rosselkhoznadzor in September, the Export Inspection Council (EIC) under the commerce ministry is in the process of preparing guidelines for disease-free procurement of raw milk. While both the draft of the disease control programme and protocol are ready, EIC awaits final approval from the commerce ministry for their implementation.

Russia has been looking to import dairy products from all possible sources, as it has been facing sanctions from western countries. But, quality remains the key concern for them. Hence, despite Russian market being opened up for Indian dairy products in January this year, the government of India does not want to start shipment in a hurry with just two plants initially.

“We are not looking at a short-term export. We want Russia to remain a long-term importer of Indian dairy products. So, we are preparing our draft disease-control plan before signing a formal protocol,” said a senior EIC official.

The official also said, “The draft is ready. We are waiting for the commerce ministry to approve it so that we will ask dairy units to adhere to it. Unless potential exporters adhere to the norms, we will not allow exporters to ship dairy products from India.”

Rosselkhoznadzor has given its nod only to two Indian firms – Parag Milk Foods (which produces Gowardhan brand dairy products) and Schreiber Dynamix (producer of Dynamix brand products) -- from India. These two plants conforms the quality requirement of Russian importers, which include safe procurement of raw milk from the plant which has more than 1,000 milking animals. The inspection for many other plants is currently underway.

Meanwhile, Parag Milk Foods’ Chairman Devendra Shah has written a letter to the commerce ministry, requesting it to sign a protocol as early as possible so that the two plants that got approval might start exports. “Let’s start with two plants and negotiate liberalisation in norms for other plants in the second phase,” said Shah.

But, the EIC official said once exports start with a set of norms, negotiation for relaxation becomes difficult. “Hence, India is looking at a foolproof mechanism for all potential exporters at one go. Also, we do not want a smooth start now and a disease outbreak followed by a ban later,” he added.

The major disease threat in animals includes tuberculosis and brucellosis. Tests for these disease cost a negligible Rs 4-5 per attempt.

In India, most dairy producers follow co-operative model and hence, do not own milking animals directly. They, however, produce and export the best quality dairy products efficiently.

“The minimum number of cattle clause is a non-starter and irrelevant today when the whole world negotiates trade in terms of quality. Once quality is assured, Russia should not have any problem in importing dairy products from India. We would be able start exports immediately after norms are liberalised," said R S Sodhi, chairman, Gujarat Cooperative Milk Marketing Federation Ltd, which produces and markets Amul brand milk and dairy products.

The Russian cheese market in volume is 2.30 lakh tonnes per annum. Apart from cheese, India can exports Russia, milk powder and other dairy products in a big way.

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First Published: Aug 18 2015 | 10:33 PM IST

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