India-New Zealand FTA comes into effect today
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The FTA will provide Indian exporters with 100% duty-free access to the New Zealand market, opening opportunities for MSMEs, women entrepreneurs, farmers and artisans. This is expected to facilitate $20 billion in investments into India in 15 years that would create opportunities across manufacturing, infrastructure, agriculture, and innovation.
New Delhi: The free trade agreement (FTA) between India and New Zealand will come into effect October 20, with the two sides setting a target of doubling bilateral trade in goods and services to NZ$7 billion (approximately ₹35,000 crore) by 2030, requiring a compounded annual growth rate (CAGR) of around 18%.The FTA will provide Indian exporters with 100% duty-free access to the New Zealand market, opening opportunities for MSMEs, women entrepreneurs, farmers and artisans. This is expected to facilitate $20 billion in investments into India in 15 years that would create opportunities across manufacturing, infrastructure, agriculture, and innovation.
Labour-intensive sectors such as textiles, apparel, leather and footwear are expected to benefit from the elimination of tariffs of up to 10%. Engineering goods, pharmaceuticals, machinery, chemicals and agricultural products are also expected to gain improved market access. The FTA agreement provides calibrated market access for New Zealand's apples, kiwifruit and Manuka honey through tariff-rate quotas, minimum import prices and other safeguards to protect domestic farmers. It also includes agricultural cooperation initiatives focused on improving productivity, technology adoption and supply chains for apples, kiwifruit and honey.
"A successful free trade agreement must be balanced, reciprocal, and mutually beneficial for both the partners. We will start tomorrow on the auspicious occasion of Dussehra, and I think it augurs very well for the future for very ambitious plans that have been drawn up by both sides," said commerce and industry minister Piyush Goyal Monday at the ceremony marking the entry into force of the India-New Zealand FRA, terming the pact a "very important milestone" in the journey of the India-New Zealand partnership.
Also read | Tariff quota notified for New Zealand fruits, honey
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"I do believe there's a lot of strength in this potential relationship between New Zealand and India that is being unlocked today, starting tomorrow," he said. India has excluded dairy products, onions, sugar, chickpeas, peas, corn, almonds and various fats and oils, gems and jewellery, aluminium, copper, arms and ammunition.
New Zealand Trade and Investment Minister Todd McClay said the agreement would create opportunities for exporters across key sectors. "Once fully implemented, 95% of New Zealand's current exports to India will benefit from tariff elimination or substantial tariff reductions, creating new opportunities across many of our key export sectors," he said.
Young Indians traveling to New Zealand for education will now be granted a guaranteed work visa, allowing them to undergo training and work in the country for a specified period. Indian farmers will gain wider market access for fruits, vegetables, spices & other agricultural produce, alongside cooperation to improve productivity, support higher incomes & strengthen livelihoods, Goyal said. The pact provides for customs clearance within 48 hours for cargo and 24 hours for express and perishable consignments. Digital certification and self-certification of rules of origin for eligible status holders are intended to reduce procedural delays and compliance costs.
Certain products from New Zealand lines are subject to tariff reductions, covering products such as honey, apples, kiwifruit, albumins including milk albumin, wine, pharmaceuticals, polymers and aluminium."These ties are not only about market access and having more exports to each other," said commerce secretary Rajesh Agrawal, adding that the focus is on building a strong and lasting economic partnership.
As part of the agreement, India and New Zealand will launch an agriculture productivity partnership. The initiative will use New Zealand's expertise in precision agriculture and related technologies to improve India's agricultural ecosystem across several areas. Agrawal said that 60-70% of New Zealand's trade is concentrated in the Asia-Pacific region, where several major economies have stronger trade ties with the country than India.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
