India and New Zealand to sign free trade agreement
NEW Zealand and India yesterday signed a new free trade agreement that will see India benefit from 0% duties on its exports to New Zealand.
New Zealand will see duties removed from 95% of its imports into India. New Zealand industries that stand to benefit would primarily be forestry, agricultural exports, horticulture, fish, seafood and honey, wine, services and industrial products.
Trade between India and New Zealand stood at $2.1bn in the first half of this year. The value was almost evenly split between the two, with New Zealand exporting slightly more to India at around $1.1bn.
Merchandise trade between the two grew 49% from $873m in India’s fiscal year 2023-2024 to $1.3bn in 2024-2025.
Discussions on the FTA began in March of this year, taking five rounds and around nine months to complete and sign. This was lauded as one of India’s “fastest-concluded FTAs” by New Delhi.
“Concluded in just nine months, this historic milestone reflects a strong political will and shared ambition to deepen economic ties between our two countries,” said Indian prime minister Narendra Modi.
“It’s forecast that New Zealand exports to India could increase $1.1bn to $1.3bn per year over the coming decades,” said New Zealand Prime Minister Christopher Luxon.
The FTA will also increase New Zealand exports of apples and kiwifruit with new quota access. This has given New Zealand the best deal for these products compared to other exporting countries.
Duty-free tariffs will be levied for quantities within the variable quota and a 50% reduction in tariffs for quantities outside the quota.
Indian labour-intensive sectors like textiles and clothing, leather and footwear are poised to benefit with duty-free access to New Zealand.
New Zealand has also pledged to invest $20bn in India over the next 15 years as it supports India’s urbanisation efforts, while gaining increased access to India’s growing middle class.
The Kiwis view India as the fastest growing G20 economy, with the middle class expected to grow from 400m currently to 700m in the next five years. This is larger than the European Union or ASEAN. New Zealand also sees India being on track to become the world’s third largest economy.
The FTA builds on trade corridors that India has in place with the rest of Asia. It also has a trade deal with ASEAN that was signed back in 2009. Negotiations began in 2023, but there has not been any sign of the deal firming up since.
With steep tariffs at 50% currently in place for exports to the US, this FTA is a welcomed addition for India as tariff uncertainty pushes them to diversify export options.
Trade talks between India and the US are currently underway, but no official announcement of any sort of tariff truce has yet to be made.
The FTA will be formally signed in the first half of next year.
Content Original Link:
" target="_blank">
