India–New Zealand Finalise Free Trade Agreement, Slashing Duties on 95% of Goods

The long-discussed Free Trade Agreement (FTA) between India and New Zealand has finally been finalized. New Zealand Prime Minister Christopher Luxon officially announced the agreement on Monday. He stated that this deal will provide New Zealand exporters with easier access to India, the world's most populous market, while Indian consumers will receive many imported products at cheaper prices.

Tariffs Eliminated or Reduced on 95% of Goods

Under this free trade deal, import duties on approximately 95% of goods coming from New Zealand to India have either been completely eliminated or significantly reduced. Most importantly, more than 50% of products will be duty-free from Day One of the agreement. This will directly benefit the Indian market and consumers.

Kiwifruit, Apples, and Wool Will Become Cheaper

The impact of this agreement will also be felt on everyday shopping. The reduction in taxes on kiwifruit, apples, and other fresh fruits imported from New Zealand is expected to reduce their prices. Additionally, wool, woolen clothing, wood, and select dairy products may also become cheaper than before.

A major relief for the middle class

The duty-free status of more than half of the products under the deal from day one means that the pressure on prices of foreign fruits, wines, and dairy products in the Indian market will ease. This agreement could prove to be a cost-saving measure for the rapidly growing Indian middle class.

New Zealand Eyes India's Growing Economy

The New Zealand government has signed this agreement in view of India's strengthening economic position. It is estimated that India's economy could exceed US$7 trillion by 2030. With rising incomes and purchasing power, India could become a large and sustainable market for New Zealand's dairy, fresh fruit, and wool industries.

Free Trade Deals with 7 Countries in Five Years

Negotiations on this trade agreement between India and New Zealand had been stalled for nearly 10 years. In March of this year, the two countries resumed negotiations and finalized the agreement within just nine months. India has previously signed similar agreements with Australia and the UAE. In the past five years, India has signed free trade deals with a total of seven countries.

India-New Zealand Trade Continues to Grow

Trade relations between the two countries are steadily strengthening. In fiscal year 2021, India's exports to New Zealand were approximately $486 million, while imports were approximately $381 million. Trade is expected to grow further in the coming years, benefiting both economies.