In a move that could open up new export markets and ease business rules, India and New Zealand have inked a free trade agreement. The pact was signed in the presence of Commerce and Industry Minister Piyush Goyal and visiting New Zealand’s Trade and Investment Minister Todd McClay. The FTA provides duty-free access for 100 per cent of India’s exports to New Zealand, covering all tariff lines or produce categories, and is expected to significantly boost MSMEs and employment by enhancing competitiveness in labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.
FTA Benefits For India
- All Indian goods, including labour-intensive sectors like textiles, plastic items, leather and engineering goods, will enter at zero duty in New Zealand, whose average import tariff is just 2.
- 3 per cent.
- New Zealand has committed to invest (FDI) USD 20 billion over 15 years.
- India has secured commitments across a wide range of high-value services sectors, including IT and IT-enabled services, professional services, education, financial services, tourism, construction and other business services.
- The FTA Opens Skilled Employment Pathways through a new Temporary Employment Entry Visa pathway for Indian professionals in skilled occupations, with a quota of 5,000 visas at any given time and a stay of up to three years.
- Duty-free wine and spirits exports from India, while wines from the Oceania country will enter the domestic market at a concessional duty, which will be reduced over a period of 10 years.
FTA Benefits For New Zealand
- India, following the template used in its trade agreement with Australia, has offered market access on 70 per cent of tariff lines (or product categories).
- The country will give duty-free access to 54.11 per cent of New Zealand exports from day one of the implementation of the free trade agreement, and these goods include sheep meat, wool, coal and several forestry and wood products, a move which is expected to make these items cheaper for Indian consumers.
- Duty concessions on agricultural goods like apples, kiwifruit, manuka honey, and albumins (including milk albumin), but with quotas and minimum import prices (MIP). Duties on several seafood items, such as mussels and salmon, will be eliminated over a period of seven years.
- The levy will be removed on a number of iron, steel and scrap aluminium items over a period of 10 years or less.
- Sensitive farm products, including apples, kiwifruit, manuka honey, and albumins (including milk albumin), are managed through tariff-rate quotas (TRQs), supported by minimum import prices (MIPs) and safeguard measures.
- Further, the import duty on avocados and persimmons by India will be eliminated in 10 years.
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