India and New Zealand have resumed Free Trade Agreement negotiations after a decade, aiming to strengthen economic ties and finalize a deal by 2025
After ten years, India and New Zealand have restarted talks for a Free Trade Agreement (FTA). This is a big step toward improving trade and economic relations between the two countries. The decision to resume discussions was announced during the visit of New Zealand’s Prime Minister, Christopher Luxon, to India.
He met with Indian Prime Minister Narendra Modi in New Delhi, where they discussed various ways to strengthen their partnership. The discussions for an FTA between India and New Zealand first started in 2010. However, after ten rounds of negotiations, the talks stopped in 2015.
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The main reason was disagreements over certain industries, especially agriculture and dairy. New Zealand, which has a large dairy industry, wanted more access to the Indian market, but India wanted to protect its local dairy farmers. Since then, both countries have continued trading, but without an official agreement that could further boost economic cooperation.
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During their recent meeting, both leaders expressed a strong commitment to working together in multiple areas, not just trade. They signed agreements to enhance cooperation in defense, food processing, pharmaceuticals, renewable energy, and critical minerals.
New Zealand’s Prime Minister also spoke about the need to strengthen ties in other fields such as security, education, tourism, sports, and culture. This shows that both countries want a broader relationship, not just limited to trade.
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With the restart of FTA negotiations, both nations hope to achieve a fair and beneficial agreement that improves market access and strengthens supply chains. They have agreed to work on this deal within a fixed timeline, with hopes of completing the agreement by the end of 2025.
An Indian official, Jaideep Mazumdar, stated that the goal is to conclude the FTA negotiations within this timeframe. Currently, trade between India and New Zealand is valued at $1.7 billion. India exports goods worth around $682 million to New Zealand, while New Zealand exports goods worth about $369 million to India.
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Both countries believe that by finalizing a free trade agreement, they can largely increase these trade numbers and bring more economic benefits to businesses and consumers in both nations. However, some challenges still need to be addressed.
One of the biggest issues is tariffs, which are taxes on imported goods. In New Zealand, the average import tariff is 2.3%, with more than half of its goods entering duty-free. On the other hand, India has an average tariff of 17.8%, which means imported goods are taxed at a higher rate.
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This difference in tariff structures has been a sticking point in previous FTA discussions. Both countries will need to find a middle ground so that businesses and consumers in both nations can benefit fairly.
Despite these challenges, the fact that India and New Zealand have decided to restart negotiations is a positive sign. Both sides have shown a willingness to find solutions and make the agreement work for both economies. If the FTA is finalized, it could open up many new opportunities for trade, investment, and cooperation in different sectors.
With the goal of finalizing the agreement by the end of 2025, both governments will work toward a balanced deal that benefits their industries, businesses, and consumers.
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