India-New Zealand FTA: A new chapter has been added in India’s business history on the auspicious occasion of Dussehra. The much-awaited Free Trade Agreement (FTA) between India and New Zealand has come into effect from today i.e. 20th October. The agreement will provide 100 percent duty-free access to the New Zealand market to Indian exporters, opening up new opportunities for micro, small and medium enterprises (MSMEs), women entrepreneurs, farmers and artisans. This is expected to bring $20 billion in investment to India over the next 15 years, creating opportunities in the areas of manufacturing, infrastructure, agriculture and innovation. Both sides have set a target of doubling bilateral trade in goods and services to NZ$7 billion (about Rs 35,000 crore) by 2030, which would require a compound annual growth rate (CAGR) of about 18 percent.

Huge relief in tariffs from textile to pharma sector

Labour-intensive sectors such as textiles, apparel, leather and footwear are expected to benefit from the elimination of tariffs of up to 10 percent. Engineering goods, pharmaceuticals, machinery, chemicals and agricultural products are also expected to have better market access. New Zealand’s Trade and Investment Minister Todd McClay said the agreement would create opportunities for exporters in key sectors. He said once fully implemented, 95 percent of current New Zealand exports to India would benefit from tariff elimination or significant tariff reductions, creating new opportunities in many of our key export sectors. Tariffs have been cut on some New Zealand products including honey, apples, kiwifruit, albumin including milk albumin, wine, pharmaceuticals, polymers and aluminium.

Expedited Customs Clearance with Guaranteed Work Visa for Indian Students

Young Indians going to New Zealand for education will now be given guaranteed work visas, allowing them to train and work in the country for a fixed period. The agreement provides for customs clearance within 48 hours for cargo and within 24 hours for express and perishable goods. Digital certification and self-certification of rules of origin for eligible status holders aim to reduce delays and compliance costs in the process.

Participation in agricultural technology with protection of domestic farmers

Piyush Goyal said Indian farmers will get wider market access for fruits, vegetables, spices and other agricultural products, as well as support to improve productivity, support higher incomes and strengthen livelihoods. The FTA agreement provides balanced market access for New Zealand apples, kiwifruit and manuka honey through tariff-rate quotas, minimum import prices and other safeguards to protect local farmers. It also includes agricultural cooperation initiatives focusing on productivity, technology adoption and supply chains for apples, kiwifruit and honey. As part of the agreement, India and New Zealand will launch an Agricultural Productivity Partnership. The initiative will utilize New Zealand’s expertise in specific agriculture and related technologies to improve India’s agricultural ecosystem in various sectors.

India kept these products out of the agreement

India has excluded dairy products, onions, sugar, chickpeas, peas, maize, nuts and various fats and oils, gems and jewellery, aluminium, copper, arms and ammunition from the agreement. Commerce Secretary Rajesh Agarwal said the relationship is not just about market access and more exports to each other, but is focused on building a strong and lasting economic partnership. Agarwal said 60 to 70 percent of New Zealand’s trade is concentrated in the Asia-Pacific region, where many major economies have stronger trade ties with that country than with India.