(April 27): India and New Zealand have signed a free-trade agreement that slashes tariffs on most goods and expands market access, as tensions in the Middle East weigh on global commerce.
The pact, concluded in December, will see New Zealand scrap duties on all Indian goods and ease mobility rules for students and workers from the South Asian nation, while New Delhi will cut tariffs on 95% of imports from the South Pacific nation.
The signing in New Delhi on Monday, before a large gathering of Indian and New Zealand business leaders, comes as the ongoing Middle East conflict sends shockwaves through global food and energy markets, including India’s. Over the past year, New Delhi has accelerated efforts to open its economy, concluding pacts with major partners including the UK and the European Union, as it seeks to reduce reliance on any one region and diversify trade.
“This is a once-in-a-generation agreement that gives New Zealand exporters unprecedented access to 1.4 billion people and an economy set to become the third-largest in the world,” New Zealand Prime Minister Christopher Luxon said in a post on X earlier in the day.
The deal was signed by India’s Commerce and Industry Minister Piyush Goyal and his counterpart Todd McClay. “We meet at a time when the world economy is being recast. The lines are being redrawn,” Goyal said at the signing. “In this changing world, India and New Zealand have chosen each other.”
McClay said he hopes the trade agreement will be implemented by the end of the year, after completing regulatory processes, including parliamentary approval.
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Luxon is facing some political pushback and is urging bipartisan support for the pact. New Zealand First, a coalition partner, has said it will vote against it in parliament because it gives too much away on immigration and does not get enough in return, particularly as dairy is excluded.
At the conclusion of trade talks last year, New Delhi had emphasised that it had protected the interests of its farmers in dairy and other agricultural products while negotiating with the world’s largest dairy exporter.
The agreement will see immediate tariff elimination on sheep meat, wool and coal from New Zealand, according to a government statement, along with eased access for fruits such as kiwis, cherries, avocados, persimmons and blueberries.
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Goyal said the FTA would bring in about US$20 billion in investment into India over time. He did not specify a timeline, though the government had previously indicated this would be over 15 years.
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