New Delhi . A free trade agreement (FTA) was signed on Monday with the aim of promoting bilateral trade and investment between India and New Zealand. The agreement was signed in the presence of Union Commerce and Industry Minister Piyush Goyal and New Zealand’s Trade and Investment Minister Todd McClay.
Piyush Goyal said in an ex-post that India and New Zealand have today signed a free trade agreement, which aims to promote trade and investment between the two countries. The agreement was signed in the presence of New Zealand’s visiting Trade and Investment Minister Todd McClay.
This historic agreement between India and New Zealand in New Delhi aims to double the bilateral trade to $5 billion in five years. Under this agreement, Indian products will get duty-free access to New Zealand, while also opening up new opportunities for Indian professionals. This agreement is expected to significantly strengthen the economic relations between the two countries.
This FTA provides duty-free access to 100 per cent of India’s exports to New Zealand. This includes all tariff lines i.e. product categories. This will increase the competitiveness of labour-intensive sectors like textiles, apparel, leather, footwear, gems and jewellery, engineering goods and processed food. This is expected to boost micro, small and medium enterprises (MSME) and employment.
Earlier, New Zealand used to impose duty of up to 10 percent on Indian products like ceramics, carpets, motor vehicles and their components. Now, by getting market access without any duty, Indian products will be able to compete with the goods of other countries. Under the agreement, India will also get duty-free raw materials like wood logs, coking coal and metal scrap for its manufacturing sector, which will reduce production costs and increase global competitiveness.
India has offered duty concessions on 70.03 per cent of duty categories (which account for 95 per cent of bilateral trade by value), while 29.97 per cent of duty categories have been kept out to protect sensitive sectors. These sensitive products mainly include dairy (milk, cream, cheese etc.), other animal products (except sheep meat), agricultural products (onion, gram, peas, maize, almonds), sugar, artificial honey, fats and oils, arms and ammunition, gems and jewellery, copper and aluminium.
Apart from this, India will eliminate duties on about 30 per cent of New Zealand’s tariff categories including products like timber, wool, sheep meat and raw leather. At the same time, 35.60 percent duty categories will be abolished in a phased manner in three, five, seven and 10 years. These include petroleum oil, malt extract, vegetable oil, selected machinery etc.
New Zealand products that will get duty concessions include wine, medicines, polymers, aluminium, iron and steel products. Whereas some products like Manuka honey, apple, kiwi fruit and albumin will come under duty rate quota. The agreement also includes a commitment to facilitate investments worth $20 billion in India. Additionally, a provision has also been added to establish a balance in case the investment target is not met.
It is noteworthy that in the year 2024, the total bilateral trade in goods and services between the two countries was 2.4 billion dollars.
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