India, New Zealand announce resumption of FTA talks

After a gap of about ten years, India and New Zealand on Sunday announced resumption of negotiations for a proposed free trade agreement to boost economic ties.

The development assumes significance as India and New Zealand began negotiating the Comprehensive Economic Cooperation Agreement (CECA) in April 2010 to boost trade in goods, services, and investment but after nine rounds of discussions, the talks had stalled in 2015.

The announcement was made after the meeting of Commerce and Industry Minister Piyush Goyal and Todd McClay, New Zealand's Minister for Trade and Investment.

McClay is part of a high-level New Zealand delegation, led by Prime Minister Christopher Luxon, which is on a four-day India visit from March 16.

In an official statement, the Commerce Ministry said: “The two nations are pleased to announce the launch of negotiations for a comprehensive and mutually beneficial India-New Zealand Free Trade Agreement (FTA) negotiations.”

Stating that the India-New Zealand FTA negotiations aim to achieve balanced outcomes that enhance supply chain integration and improve market access, the government said with bilateral trade continuing to grow steadily, surpassing USD 1 billion during April-January 2025, the FTA negotiations aim to unlock new avenues for businesses and consumers, fostering mutual growth and prosperity of our nations.

India’s proposed FTA with New Zealand would have limited benefit to domestic companies as they are already enjoying duty-free access to a significant number of goods in that market, a report by think tank Global Trade Research Initiative (GTRI) has said.

It noted that New Zealand’s average import tariff is just 2.3 per cent, compared to India’s 17.8 per cent.

As against USD 1.02 billion in 2022-23, the bilateral trade between the two countries stood at USD 873.4 million (exports USD 538.33 million and imports USD 335 million) in 2023-24.

“58.3 per cent of New Zealand’s tariff lines (or product categories) are duty-free, meaning Indian products already enjoy significant access without a trade pact in the New Zealand market,” the GTRI report has said.

With over 2.50 lakh people of Indian origin, the Indian diaspora in New Zealand provides a strong cultural link that can be used to strengthen trade relations.

India's key goods 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; and basmati rice.

The main imports are 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.

According to trade experts, the tricky point in the talks would duty concessions in agri products like apple, kiwi, dairy, and wine.

India has not yet given any significant concession in dairy to any of its other FTA partners, including Singapore, Japan, South Korea, and the Asean.