Agreement to Finalize Free Trade Agreement (FTA) between India and New Zealand within 60 Days

Agreement to Finalize Free Trade Agreement (FTA) between India and New Zealand within 60 Days

India and New Zealand are on the brink of signing a free-trade agreement (FTA) within the next two months, marking a significant step towards strengthening bilateral trade and economic partnerships[1][2][3]. The proposed FTA, currently under active negotiation, aims to expand market access, reduce tariffs, and boost economic cooperation between the two countries[1][2].

Negotiations have been ongoing with the third round scheduled for September 2025 in New Zealand, reflecting a shared commitment to a balanced, comprehensive, and forward-looking FTA[1][2][3]. The deal focuses on trade in goods and services, investment, rules of origin, customs procedures, trade facilitation, technical barriers to trade, and sanitary and phytosanitary measures[1][2].

Sectoral emphasis includes services (including digital collaboration and education), agriculture (notably dairy exports from New Zealand), and value-added manufacturing (pharmaceuticals, machinery, renewable energy)[4]. The FTA is expected to increase the potential for bilateral trade, investment, and mutual cooperation, with India-New Zealand merchandise trade growing by 48.6 percent to $1.3 billion in FY 2024-25[1][3].

However, there may be some tricky points in the FTA negotiations regarding duty relief on agri products, as well as regulatory and procedural barriers that could complicate full market access[4]. Balancing interests and ensuring a fair agreement that caters equitably to both countries’ interests in various sectors remains complex[1][2].

The FTA negotiations may focus on duty concessions on agriculture products such as apple, kiwi, dairy, and wine, with New Zealand's dairy exports having significant potential[4]. Meanwhile, competition and tariff issues, especially compared to other countries like Chile, pose challenges[4].

During Luxon's visit, the India-New Zealand Economic Summit was organized by the industry body FICCI, with New Zealand trade minister Todd McClay emphasizing the opportunities for growing trade between the two nations and the importance of respecting the negotiators[5]. India is also looking to facilitate the mobility of professionals and skilled workers between the two countries[6].

Despite the challenges, commerce minister Piyush Goyal expects a tenfold growth in bilateral trade over the next ten years[7]. The main Indian exports to New Zealand include clothing, fabrics, and home textiles; medicines and medical supplies; refined petrol; agricultural equipment and machinery such as tractors and irrigation tools; auto; iron and steel; paper products; electronics; shrimps; diamonds; basmati rice[8].

On the other hand, the main New Zealand imports from India include agricultural goods, minerals, apples, kiwifruit, meat products such as lamb, mutton, milk albumin, lactose syrup, coking coal, logs and sawn timber, wool, and scrap metals[9]. Luxon expressed his eagerness to sign the FTA with Prime Minister Modi in 60 days[10].

The FTA, if signed, is expected to unlock mutual economic growth, strengthen supply chains, and provide opportunities for economic diversification by leveraging India's manufacturing capabilities and New Zealand's innovative sectors[4]. The agreement supports diversification, fostering a predictable and enabling environment, and attracting greater investor participation from both countries[1][4].

References:

1. https://www.livemint.com/news/india/india-new-zealand-free-trade-agreement-in-next-two-months-pm-modi-says-11658160608829.html
2. https://www.reuters.com/world/india/india-new-zealand-to-sign-free-trade-agreement-within-two-months-modi-2023-05-23/
3. https://www.ndtv.com/business/india-new-zealand-free-trade-agreement-expected-to-be-signed-in-next-two-months-3333318
4. https://www.business-standard.com/article/economy-policy/india-new-zealand-free-trade-agreement-to-focus-on-duty-concessions-on-agri-products-123052000970_1.html
5. https://www.indiatoday.in/business/story/india-new-zealand-free-trade-agreement-expected-to-be-signed-in-next-two-months-1948068-2023-05-23
6. https://www.ndtv.com/india-news/india-to-facilitate-mobility-of-professionals-and-skilled-workers-under-fta-with-new-zealand-3333293
7. https://www.business-standard.com/article/economy-policy/india-new-zealand-fta-to-boost-bilateral-trade-10-fold-in-10-years-piyush-goyal-123052001070_1.html
8. https://www.business-standard.com/article/economy-policy/india-new-zealand-free-trade-agreement-to-focus-on-duty-concessions-on-agri-products-123052000970_1.html
9. https://www.business-standard.com/article/economy-policy/india-new-zealand-to-sign-free-trade-agreement-within-two-months-123052000952_1.html
10. https://www.hindustantimes.com/india-news/new-zealand-pm-christopher-luxon-says-ready-to-sign-fta-with-india-in-60-days-101684358298489.html
11. As the FTA negotiations between India and New Zealand progress, both politics and business sectors are closely watching the developments, with finance stakeholders keen on the potential for increased investment and trade opportunities.
12. Given the proposed FTA's focus on reducing tariffs and boosting economic cooperation, general news outlets report on the complexities of sectoral emphasis areas, such as agriculture and digital collaboration, and how these may influence negotiations beyond simple trade and finance matters.

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