India-New Zealand FTA: India and New Zealand today signed a free trade agreement (FTA) aimed at boosting two-way trade and investment, a PTI report said. He added that the agreement was signed by Union Commerce and Industry Minister Piyush Goyal and visiting New Zealand Trade and Investment Minister Todd McClay.
The FTA provides duty-free access for 100 percent of India’s exports to New Zealand, covering all tariff items or categories of production, and is expected to significantly boost SMEs and employment by increasing competitiveness in labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods and processed food.
Previously, New Zealand maintained peak tariffs of up to 10 percent on key Indian exports, including ceramics, carpets, automobiles and auto components.
With zero-tariff market access from entry into force like New Zealand’s other trading partners, Indian products will be fully competitive and on a level playing field in the country.
Significantly, India has also secured duty-free inputs for its manufacturing sector, including timber, coking coal and metal waste and scrap, which has reduced production costs and strengthened the global competitiveness of Indian industry.
India, on the other hand, offered to liberalize tariffs on 70.03 percent of tariff items covering 95 percent of the value of bilateral trade, leaving 29.97 percent of tariff items excluded to protect India’s sensitive industries.
Excluded in particular are — dairy products (milk, cream, whey, yogurts, cheeses, etc.), animal products (other than mutton), agricultural products (onions, chickpeas, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, weapons and ammunition, gems and jewelry, copper, bar products, copper products, bar cats and products thereof (ingots, billets, wire rods) among others.
For 30 per cent of New Zealand’s tariff items, India will ensure the abolition of duties on goods such as timber, wool, mutton and rawhide hides.
Similarly, 35.60 per cent of tariff items are subject to phase-out over 3, 5, 7 and 10 years, including petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery and peptones.
New Zealand products subject to tariff reductions include wine, pharmaceutical drugs, polymers, aluminium, iron and steel products and goods subject to tariff quotas of only 0.06 per cent, including Manuka honey, apples, kiwifruit and albumins, including milk albumin.
The FTA also includes a commitment to facilitate $20 billion in investment in India.
A rebalancing clause is incorporated into the agreement to provide a framework for addressing any shortfall in investment delivery, ensuring reliable and tangible economic results.
Total bilateral trade in goods and services to reach $2.4 billion in 2024.
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