India and New Zealand resume FTA talks after a decade

March 17, 2025 Hot from the Oven Valli Sarvani

After nearly ten years, India and New Zealand have revived discussions on a Free Trade Agreement (FTA) to enhance economic cooperation.

Talks originally began in April 2010 under the Comprehensive Economic Cooperation Agreement but stalled in 2015 after nine rounds.

The decision to restart negotiations was announced following a meeting between India’s Commerce Minister Piyush Goyal and New Zealand’s Trade Minister Todd McClay.

The discussion coincided with New Zealand Prime Minister Christopher Luxon’s four-day visit to India, which began on March 16.

The proposed FTA aims to strengthen supply chain integration and market access between both nations. India’s Commerce Ministry highlighted that bilateral trade exceeded $1 billion during April-January 2025, signalling steady growth.

Minister Goyal emphasized that the agreement could open new trade opportunities, benefiting businesses and consumers alike.

However, trade analysts remain cautious about the deal’s impact. According to the Global Trade Research Initiative (GTRI), Indian exporters already enjoy duty-free access to many New Zealand products, reducing the agreement’s potential benefits.

New Zealand’s average import tariff stands at just 2.3%, while India’s is significantly higher at 17.8%. Additionally, 58.3% of New Zealand’s product categories are already tariff-free, giving Indian goods substantial access without a formal trade pact.

In 2023-24, bilateral trade was valued at $873.4 million, with Indian exports at $538.3 million and imports at $335 million.

Key Indian exports to New Zealand include textiles, pharmaceuticals, petroleum products, machinery, and electronics. On the other hand, India imports agricultural products, minerals, kiwifruit, apples, dairy, timber, and coal from New Zealand.

Experts suggest that duty concessions on agricultural goods—especially dairy, apples, kiwifruit, and wine—could be a contentious issue during negotiations.

Despite these challenges, the 250,000-strong Indian diaspora in New Zealand offers a strong cultural and economic bridge that could help foster deeper trade relations.

While the FTA holds promise, balancing interests will be crucial to ensuring a mutually beneficial agreement.

Image by Sukhjinder from Pixahive (Free for commercial use / CC0 Public Domain)

Image Published on October 01, 2020