India-New Zealand FTA Talks Concluded
India's importance in global trade continues to rise. Last week, India completed its second trade agreement with New Zealand. Just the previous week, India had signed a Comprehensive Economic Partnership Agreement (CEPA) with Oman. With the Free Trade Agreement (FTA) with New Zealand, which has a per capita income of $49,000, agricultural products and other labor-intensive sectors will now be exported to New Zealand without tariffs. This will provide significant benefits to farmers and MSMEs in India.
India has not yet opened its agricultural and dairy markets to New Zealand, but it has granted significant tariff relief on products like apples, kiwis, manuka honey, and New Zealand wine, making them cheaper in India. In return, New Zealand will help improve Indian productivity in the apple, kiwi, and dairy sectors by providing advanced technology. Tariffs on imports of coking coal, wood, and scrap materials from New Zealand will also be eliminated, which will lower raw material costs for Indian manufacturing.
Manufacturing Investment of ₹1.8 Lakh Crore
Under the FTA, New Zealand will invest ₹1.8 lakh crore in Indian manufacturing over the next 15 years. Although India’s trade with New Zealand was valued at just $1.3 billion in FY 2024-25, Indian exporters now have a huge opportunity to increase exports of textiles, leather products, engineering goods, gems and jewelry, pharmaceuticals, chemicals, and plastics. Currently, Indian goods are subjected to a 2-10% tariff, which will be reduced to zero once the FTA is implemented.
New Opportunities for Indian Students and Workers in New Zealand
The approved FTA will be signed within the next three months, and its implementation will begin within one or two months after that. New Zealand, which has been facing a shortage of skilled labor, has opened its doors to Indian students and workers. There will be no tariffs on 118 types of service exports, including health, IT, and tourism. Indian students studying in New Zealand will also be allowed to work up to 20 hours per week during their studies.
New Work Visa Opportunities for Youth
Indian students specializing in science, technology, mathematics, and English will be eligible for a work visa for two to four years. Commerce and Industry Minister Piyush Goyal said that this is a comprehensive FTA that will provide opportunities for farmers, MSMEs, the service sector, and Indian youth to prosper. The FTA talks were completed in a record time of just nine months by the team of female officials from the Ministry of Commerce.
Growing Number of FTAs for India
In just a few years, India has signed FTAs with Mauritius, Australia, the UAE, EFTA countries (Switzerland, Norway, Iceland, and Liechtenstein), the UK, and Oman. Now, New Zealand has joined the list. Next month, India could finalize an FTA with the European Union, and next year, agreements with major countries like the US and Canada are also expected.