Why Is It in the News?
India and New Zealand have concluded trade negotiations aimed at boosting bilateral trade to $5 billion in the next 5 years.
Introduction:
The proposed Free Trade Agreement (FTA) aims to reduce trade barriers, deepen economic engagement, strengthen people-to-people ties and promote investment flows.
It comes amid India’s push for diversified trade partnerships beyond traditional markets. The agreement reflects India’s shift towards issue-based and interest-based trade agreements.
Key Provisions of The Deal:
• Duty free access for a wide range of goods traded between both countries
• Reduction of tariffs on agricultural and industrial products
• Market access commitments for services
Eg; IT, education, professional services
• FDI commitment of $20 billion over 15 years
• Mobility provisions – 5,000 employment visas annually for Indians and a stay of up to 3 years
• Temporary entry provisions for AYUSH practitioners, yoga instructors, Indian chefs, music teachers as well as high demand sectors
• Safeguards for sensitive sectors like Indian agriculture and dairy
Eg; Rice, wheat, dairy and soya are excluded from market access
• Regulatory cooperation to ease customs procedures
Benefits to India:
- Enhanced export opportunities for Indian goods
Eg; Textiles, pharmaceuticals, engineering products and services - Supports MSMEs and startups – access to a high-income market
- Diversified markets for Indian exporters amid global protectionism
- Boosts employment opportunities
- Strengthens India’s presence in the Indo-Pacific region
- Foreign investment + Technology transfer
Benefits to New Zealand:
- Increased investment opportunities in India’s expanding infrastructure
- Supply chain resilience through deeper economic integration with India
- Employment generation
- Diversification of export markets
- Tariff reduction on key exports such as meat, wool and forestry products
- Growth in services exports especially tourism, education and professional services
Way Forward:
• Timely ratification
• Phased tariff liberalisation
• Protection of sensitive sectors
• Export competitiveness
• MSME integration
• Services sector expansion
• Skill mobility facilitation
• Trade facilitation measures
• Periodic review mechanism
• Institutional coordination
Conclusion:
The India – New Zealand trade agreement, if implemented effectively, can deliver inclusive growth while enhancing India’s global trade footprint. Thus, the deal aligns with India’s vision of Viksit Bharat, while simultaneously strengthening Atmanirbhar Bharat by enabling India to engage globally from a position of domestic strength, self-reliance and confidence.
