Commerce and Industry Minister Piyush Goyal said on Monday that the India-New Zealand Free Trade Agreement (FTA) will come into effect from October 20. With the implementation of this agreement, nearly 100 percent of India’s products, including labor-intensive sectors such as leather, footwear, apparel and textiles, will have zero market access. Goyal told reporters that the agreement signed on April 27 gives duty-free access to all Indian exports to New Zealand from Tuesday. He said the agreement would also pave the way for significant investment of US$ 20 billion from New Zealand to India over the next 15 years. He said that this agreement will create huge opportunities for Indian exporters.

New Zealand is India’s 140th export destination

Flagging off JCB India’s small excavators to be exported to New Zealand under the trade agreement, Goyal said the company exports 25 per cent of its total production from India to various countries. He said that I am giving him a target to increase to 50 percent. New Zealand has now become their 140th export destination. The agreement also promotes agricultural productivity partnerships, under which New Zealand technology will meet India’s large-scale and growing demand. Goyal said that sensitive sectors like dairy, onion, gram, peas, maize, almonds, artificial honey and sugar have been kept out of the scope of this trade agreement.

Facilitate FDI

The agreement, which will come into effect in India on October 20 at 12:01 am, will also open the door to the Indian market of 1.4 billion people for New Zealand goods. In addition, the agreement will expand opportunities for services, professionals, students and agricultural cooperation and facilitate foreign direct investment (FDI) of US$20 billion from New Zealand to India over the next 15 years. The FTA will benefit India’s fruits and vegetables, coffee, tea, cocoa and spices, grains, processed food, textiles and clothing, leather and footwear, pharmaceuticals, engineering goods, marine products and plastics and rubber sectors. India has excluded dairy products, onions, gram, peas, maize, almonds, sugar and artificial honey and fats and oils from the agreement.

Access will improve

New Zealand has agreed to open up 118 service sectors or sub-sectors to Indian service providers, which will give them better access to its market under the FTA. These include IT, professional services, telecommunications, construction, education, financial services and tourism. It may now be easier for Indian companies and professionals to provide services in New Zealand. While New Zealand is exempting 100 percent of its duty lines, the figure for India is 70 percent. India offers duty-based quotas for apples, kiwifruit, manuka honey and albumin with minimum import price (MIP) provisions and other safeguards.

At the event, New Zealand’s Trade and Investment Minister Todd McLay said the agreement would create opportunities for exporters in key sectors. He said once the agreement is fully implemented, 95 percent of New Zealand’s current exports to India will benefit from duty elimination or significant duty reduction. Commerce Secretary Rajesh Agarwal said the challenge is to convert the provisions of the agreement into tangible benefits.