After a decade's absence, Fonterra is dipping its toes back into the vast Indian dairy market in the form of a joint venture with the sub-continent's biggest retailer, Future Group.
The co-op said in a statement that it had tied up with the Future Consumer, which is part of Future Group, to make a range of consumer and foodservice dairy products that will help meet the growing demand for high-quality dairy nutrition in India.
It will be Fonterra's second foray into India since the co-op's inception.
In 2001, Fonterra formed a joint venture with Bangalore-based Britannia Industries but pulled out in 2009, saying at the time that it no longer fitted its strategic priorities.
But Lukas Paravicini, Fonterra's chief operating officer global consumer and foodservice, said the co-op had over the years carefully studied opportunities in India - a country that is self sufficient in dairy.
The venture - Fonterra Future Dairy Partners - will enable Fonterra to establish a presence in India, he said.
"It will allow us to prepare the groundwork and make the most of our expertise as we enter the world's largest and fastest growing dairy industry," he said.
Consumer demand for dairy in India over the next seven years is set to increase by 82 billion litres – seven times the forecast growth for China, he said.
The partnership will be driven by growth through profitability. The initial stages of the partnership will focus on product development, and marketing.
The first consumer products will be launched by the middle of 2019, using both locally sourced milk and dairy products from New Zealand.