India-New Zealand Free Trade Agreement to enter into force on October 20: Piyush Goyal | Today’s news
New Delhi: Commerce and Industry Minister Piyush Goyal said on Monday that India’s labour-intensive sectors including textiles and garments, leather and footwear, gems and jewelery will be the main beneficiaries of the country’s Free Trade Agreement (FTA). with New Zealand coming into force on Tuesday.
The agreement promises duty-free access for all Indian goods to New Zealand, India’s second largest export destination in Oceania, a region that also includes Australia, Papua New Guinea and several smaller Pacific island states. Indian goods from labour-intensive industries and several others are currently subject to an import duty of up to 10% into New Zealand.
Read also | The government plans ₹25,000 crore for qualifications to sharpen textile exports
The deal is part of India’s efforts to forge bilateral deals to boost exports at a time when geopolitical conflicts have intensified and global supply chains are being realigned.
The FTA will also spur $20 billion in investment in India in the coming years, Goyal said at an event in the state capital to announce the FTA from Tuesday, which was attended virtually by his New Zealand counterpart Todd McClay.
New Zealand will have preferential access to the Indian market for 70% of products, with India keeping sensitive sectors such as dairy out of the pact and offering limited access to the agricultural sector. About 30% of these products will have zero customs access from day 1.
Doubling business
Goyal has set a target of more than doubling bilateral trade in goods and services to about $7 billion by 2030.
Apart from labour-intensive sectors, the pact will benefit a wide range of sectors such as engineering goods, processed food, ceramics, automobiles and auto components, Goyal said.
“For our farmers, this agreement combines new opportunities with appropriate safeguards,” Goyal said.
Sensitive Indian products such as dairy products, most animal meat except mutton, sugar, edible oils, onions, chickpeas, almonds and artificial honey will be kept out of tariff concessions.
Read also | Panama is positioning itself as a trade gateway to Latin America for Indian businesses
Apples, kiwifruit and honey will enter only through tariff quotas, minimum import prices and seasonal windows. An Agricultural Productivity Partnership has been proposed to bring New Zealand technology in orchard management, post-harvest handling and sustainable beekeeping to India.
The free trade agreement opens up “significant new opportunities for our exporters, especially SMEs, artisans, farmers and women entrepreneurs”, Goyal said.
India’s agriculture and food sectors can expand exports of fruit and vegetables, coffee, spices, cereals and processed foods that are not sufficiently available in New Zealand, Goyal said.
Profit from regulation
India’s pharmaceutical and medical device industries will benefit from streamlined regulatory processes that will facilitate better market access.
Commerce Minister Rajesh Agrawal said the FTA aims to build a long-term economic partnership beyond tariff reduction and market access. Every economy, however small, has its own unique strength and New Zealand comes with its own value, he said.
The agreement, signed by Goyal and McClay in New Delhi in April, was ratified by the New Zealand parliament.
Read also | The government is considering a ₹8,000 crore corpus for the genome research initiative
Indian manufacturers will also get duty-free access to critical New Zealand inputs such as wood logs, coking coal and scrap metal, reducing production costs at home.
India’s commerce ministry said the FTA opens up about 118 service sectors to Indian firms, including IT, professional services, audio-visual, construction and tourism, with most-favoured-nation clauses in 139 sub-sectors.
In addition, New Zealand offered a reserved quota of 5,000 temporary work entry visas per year for skilled Indians, including those in IT, engineering and healthcare, and 12-month multiple entry visas for 1,000 young people to live and work, unlimited student mobility with work rights after graduation for up to three years for science, technology, engineering and mathematics (STEM) PhD students and four years for PhD students.
