First round of Free Trade Agreement talks between India, New Zealand concludes
India and New Zealand are currently engaged in discussions for a potential Free Trade Agreement. These talks aim to enhance trade and investment between the two nations. Negotiations resumed in March 2025 after a decade-long pause. The FTA seeks to unlock new opportunities for businesses and consumers. Disparities in tariff structures and demands for dairy market access pose challenges.
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The five-day talks between India and New Zealand for a proposed Free Trade Agreement (FTA), aimed at boosting bilateral trade and investment, will conclude on Friday, an official said. After a gap of about ten years, the two countries on March 16, 2025 announced resumption of negotiations for the FTA."The first round of negotiations started on May 5 here, (New Delhi)" the official said.India and New Zealand began negotiating the Comprehensive Economic Cooperation Agreement (CECA) in April 2010 to boost trade in goods, services, and investment. However, after ten rounds of discussions, the talks stalled in February 2015.With bilateral trade continuing to grow steadily, surpassing USD 1 billion during April-January 2025, the FTA would help unlock new avenues for businesses and consumers.According to the think tank Global Trade Research Initiative (GTRI), a major challenge in the renewed talks will be the disparity in tariff structures.New Zealand's average import tariff is only 2.3 per cent, with over half of its tariff lines already duty-free, meaning Indian goods already have substantial access to its market.In contrast, India's average tariff stands at 17.8 per cent, meaning it would have to make significant reductions, making a traditional FTA less attractive for India."As talks resume, both countries will need to find common ground on these issues to move forward successfully," GTRI Founder Ajay Srivastava said.Earlier New Zealand has demanded greater access to India's dairy market, which India has resisted to protect its domestic industry that supports millions of farmers.Currently, India's dairy imports from New Zealand are minimal (around USD 0.57 million). The country has not given duty concessions in the sector in any of its trade pacts.New Zealand may look for duty concessions on products like meat and wine.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 as against USD 1.02 billion in 2022-23.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.In FY24, India's services exports to New Zealand stood at USD 214.1 million, while New Zealand's services exports to India totalled USD 456.5 million.India's key services exports include IT and software services, provided by companies such as Infosys and HCL, along with telecommunications services to support New Zealand's digital infrastructure.India also exports healthcare services , including medical tourism , pharmaceutical research, and telemedicine. Financial services are another important area, with Indian banks and fintech companies offering digital payment solutions.New Zealand's services exports to India are led by education services, with thousands of Indian students pursuing higher education in New Zealand.Tourism services are also significant, as Indian tourists are drawn to New Zealand's natural landscapes and adventure activities.New Zealand provides fintech services, offering digital solutions to India's financial sector, and specialised aviation training programmes for pilots and cabin crew.Additionally, New Zealand firms offer niche IT services such as data analytics and automation solutions.
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