Fonterra has made the first major step toward establishing a pilot dairy farm in India, with a memorandum of understanding signed with an Indian fertiliser co-operative.
The agreement with the Indian Farmers Fertiliser Co-operative will allow a farm with a herd size of 3500 cows to be built in India.
Fonterra chief executive Andrew Ferrier says the company is working on a feasibility study for the project, which is due to be completed soon.
Mr Ferrier says the approach will be similar to that taken in China, where Fonterra established a pilot farm in the province of Tangshan in 2007.
He says there is a vast market in India for high quality, safe milk and and Fonterra hopes to establish large scale, world class dairy farms to meet the demand.