India-New Zealand FTA Negotiations Resumed

March 17, 2025

India and New Zealand have resumed negotiations for a Free Trade Agreement (FTA) after a decade-long hiatus. This decision marks step towards enhancing bilateral economic ties. The announcement coincided with New Zealand Prime Minister Christopher Luxon’s visit to India. The two nations aim to unlock new trade opportunities and encourage mutual growth.

Historical Context

Negotiations for the India-New Zealand FTA began 14 years ago. After ten rounds of discussions, talks stalled in 2015 due to various challenges. Both countries have since sought to strengthen their economic partnership. The renewed negotiations are timely, given the current global trade landscape influenced by geopolitical tensions.

Recent Developments and Objectives

Commerce Minister Piyush Goyal expressed optimism about the FTA. He brought into light that bilateral trade exceeded USD 1 billion from April to January 2025. The FTA aims to enhance supply chain integration and improve market access. This reflects a shared vision for a resilient economic partnership.

Key Economic Indicators

In the financial year 2023-24, India exported goods worth USD 0.54 billion to New Zealand. Conversely, imports from New Zealand amounted to USD 0.33 billion. The total trade value between the two countries reached USD 1.75 billion. Key exports from India include pharmaceuticals and textiles, while imports consist of iron, steel, and agricultural products.

Challenges in Negotiations

A challenge in the FTA talks is the disparity in tariff structures. New Zealand has an average import tariff of only 2.3%, while India’s average tariff stands at 17.8%. This difference complicates negotiations and may hinder the attractiveness of a traditional FTA for India.

Sectoral Interests of Both Nations

New Zealand seeks greater market access for its agricultural products, including wine. India, however, maintains high import tariffs to protect its agriculture sector. Dairy products are particularly sensitive for India. On the other hand, India is keen to expand its services sector and secure more work visas for skilled workers.

Geopolitical Context and Future Prospects

The announcement of the FTA negotiations comes as countries globally are pursuing bilateral agreements. India is currently negotiating trade deals with several nations, including the US and the UK. The outcome of these negotiations may influence the dynamics of the India-New Zealand FTA.

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