Trade Talks
India, New Zealand restart FTA talks after 10 years
This story was originally published at 10:01 IST on 17 March 2025
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NEW DELHI – India and New Zealand have restarted talks on a free trade agreeement a decade after the first round of negotiations fell through. Commerce Minister Piyush Goyal announced the start of the trade pact talks on Sunday, after meeting Todd McClay, New Zealand's minister for trade and investment. The announcement came a day before a bilateral meeting between Prime Minister Narendra Modi and New Zealand Prime Minister Christopher Luxon.
"With bilateral trade continuing to grow steadily, surpassing USD 1 billion during April-January 2025, the FTA negotiations aim to unlock new avenues for businesses and consumers, fostering mutual growth and prosperity of our nations," Commerce Minister Piyush Goyal Sunday said in a post on social media platform X, formerly Twitter. In 2023-24 (Apr-Mar), India exported goods worth $538.3 million to New Zealand. New Zealand's goods exports to India were at $335.1 million last year.
The two nations had first started working on a FTA in April 2010, but the talks stalled in February 2015 becuase of disagreements over market access and trade priorities. According to think tank Global Trade Research Initiative, a major challenge in the last round of negotiations was New Zealand's demand for greater access to India's dairy market, which was resisted by New Delhi to protect its domestic dairy industry.
"Currently, India's dairy imports from New Zealand are minimal around $0.57 million, and while India may consider limited imports of value-added dairy products, it remains firm against allowing raw dairy imports," Ajay Srivastava, founder of Global Trade Research Initiative, said in a note.
"A major challenge in the renewed talks will be the disparity in tariff structures. New Zealand's average import tariff is only 2.3%, with over half of its tariff lines already duty-free, meaning Indian goods already have substantial access to its market," Srivastava noted. India's average tariff, on the other hand, stands at 17.8%, which would have to be lowered significantly. This, Srivastava said, would make a traditional FTA less attractive for India. End
US$1 = INR 86.84
Reported by Shubham Rana
Edited by Avishek Dutta
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