India, New Zealand might ink free trade agreement soon
What's the story
India and New Zealand are on the verge of finalizing a free trade agreement (FTA), Commerce Secretary Rajesh Agrawal said today. The announcement comes after the fourth round of negotiations, which included virtual and in-person meetings at both official and ministerial levels. Last week, New Zealand Trade Minister Todd McClay met with Commerce and Industry Minister Piyush Goyal to review progress in these discussions.
Trade talks
FTA negotiations: A historical perspective
The FTA negotiations were formally launched on March 16, 2025. However, it's worth noting that this isn't the first time India and New Zealand have tried to strike a trade deal. The Comprehensive Economic Cooperation Agreement (CECA) talks began in April 2010 but stalled after nine rounds of discussions in 2015.
Economic impact
A catalyst for trade and investment
India's bilateral merchandise trade with New Zealand stood at $1.3 billion in 2024-25, a nearly 49% growth from the previous year. The proposed FTA is expected to further boost the trade flows, promote investment linkages, strengthen supply chain resilience, and also create a predictable framework for businesses in both countries. Notably, New Zealand's average import tariff is just 2.3%.
Trade facilitation
FTA aims to reduce customs duties, ease trade norms
An FTA typically involves two countries significantly reducing or eliminating customs duties on most goods traded between them. It also involves easing rules to promote trade in goods and services. The proposed agreement between India and New Zealand is likely to follow this model, further strengthening their economic ties and boosting bilateral trade.