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India and New Zealand have announced a new Free Trade Agreement (FTA) that will make the majority of goods traded between the two countries duty-free.
Getting into it: The deal, brokered after a multi-year negotiation process, will eliminate or significantly reduce tariffs on most goods traded between India and New Zealand. Under the agreement, India will gain zero-duty access for all its goods exports to New Zealand, while New Zealand will receive tariff concessions across roughly 70% of India’s tariff lines, covering about 95% of its existing exports on a phased basis. However, India has carved out sensitive sectors, excluding key dairy products such as milk, cheese, butter, yoghurt, and whey, as well as certain agricultural goods, to protect domestic farmers and industries.
India’s exports to New Zealand are expected to benefit most in sectors such as textiles and apparel, engineering goods, leather and footwear, marine products, gems and jewellery, handicrafts, and automobiles, all of which will now enjoy duty-free entry. New Zealand, meanwhile, is aiming to expand exports of wool, fruit, wine, horticultural products, wood, forestry goods, sheep meat, and coal to India. The agreement also includes a commitment by New Zealand to invest $20 billion in India over 15 years, alongside provisions to improve mobility for Indian professionals, skilled workers, and students.
According to figures cited in the sourced text from India’s commerce ministry, bilateral merchandise trade currently stands at $1.3 billion, while total trade in goods and services reached $2.4 billion.
Leaders from both countries have strongly endorsed the pact. New Zealand Prime Minister Christopher Luxon said exports to India are forecast to increase by $1.1 billion annually over the next two decades, translating into more jobs and higher wages for New Zealanders. India’s Commerce Minister Piyush Goyal described the agreement as people-centric, saying it would open global opportunities for Indian businesses and youth.
Despite this, the deal has drawn sharp criticism from within New Zealand, particularly from the New Zealand First party. Its leader and Foreign Minister Winston Peters has called the agreement “neither free nor fair,” arguing it gives away too much on immigration while failing to secure meaningful access for New Zealand’s crucial dairy sector, and has vowed his party will oppose the enabling legislation in Parliament.
