India-New Zealand FTA Negotiations Resumed

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Posted by newadmin on 2025-03-18 08:38:53 |

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India and New Zealand have officially resumed negotiations for a Free Trade Agreement (FTA) after a decade-long pause, marking a significant step towards strengthening bilateral economic relations. The announcement came during New Zealand Prime Minister Christopher Luxon’s visit to India, signaling both nations’ intent to explore new trade opportunities and foster mutual economic growth.

The FTA negotiations first began 14 years ago, with discussions spanning ten rounds before talks stalled in 2015 due to unresolved challenges. Since then, both countries have continued to explore ways to enhance economic cooperation. The revival of negotiations comes at a crucial time, given the shifting global trade landscape and increasing geopolitical complexities.

Commerce Minister Piyush Goyal expressed confidence in the renewed talks, emphasizing that bilateral trade between India and New Zealand exceeded USD 1 billion from April to January 2025. The primary objective of the agreement is to strengthen supply chain integration and improve market access, aligning with a shared vision for a resilient and dynamic economic partnership.

In the financial year 2023-24, India’s exports to New Zealand were valued at USD 0.54 billion, while imports from New Zealand stood at USD 0.33 billion. The total trade between the two nations reached USD 1.75 billion, with key Indian exports including pharmaceuticals and textiles, while imports primarily consisted of iron, steel, and agricultural products.

One of the critical challenges in the negotiations lies in the difference in tariff structures. New Zealand maintains an average import tariff of 2.3%, whereas India’s average tariff is significantly higher at 17.8%. This discrepancy complicates the agreement’s terms, making it difficult for India to adopt a conventional FTA framework.

Sectoral interests also play a crucial role in shaping the discussions. New Zealand is keen to gain greater market access for its agricultural products, particularly wine, while India remains cautious due to its high import tariffs aimed at protecting domestic farmers. Dairy products remain a particularly sensitive issue for India. Meanwhile, India is looking to expand its services sector and secure additional work visas for skilled professionals, which could be a key factor in the final agreement.

The renewed FTA discussions come at a time when several countries are engaging in bilateral trade agreements. India is currently negotiating trade deals with the US and the UK, and the outcomes of these discussions could have a significant influence on the final structure of the India-New Zealand agreement. With both nations committed to deeper economic cooperation, the progress of these negotiations will be closely watched in the coming months.

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