Syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Context and Significance
- India–New Zealand FTA announced on 22 December 2025 by both Prime Ministers.
- Concluded within nine months, reflecting strong political commitment and trade agility.
- Follows India’s recent FTAs with the U.K. and Oman, signalling diversification strategy.
- Reinforces India’s image as a reliable, resilient economic partner amid global trade uncertainty.
Strategic Orientation of the FTA
- Emphasises services trade and labour mobility, India’s underutilised comparative advantages.
- Reflects a shift towards balanced, rules-based, and equitable trade partnerships.
- Aligns domestic reforms with India’s broader global economic vision.
Market Access and Tariff Commitments
- New Zealand to eliminate duties on 100% tariff lines, ensuring duty-free Indian exports.
- India to provide market access on 70% of tariff lines.
- India granted concessions on apples, marking a rare agricultural opening.
- Sensitive sectors like dairy, sugar, spices, edible oils remain fully protected.
Services, Mobility, and Human Capital
- New Zealand offers widest services access to India till date.
- Covers IT, education, fintech, telecom, tourism, construction, and healthcare services.
- Enhanced mobility for IT professionals, engineers, healthcare workers, educators.
- Post-study work opportunities for Indian students strengthen global exposure and employability.
- Provides stability amid skilled mobility restrictions in several advanced economies.
Investment and Industrial Benefits
- New Zealand commits $20 billion investment over 15 years in India.
- Duty-free intermediate inputs like wooden logs, coking coal, metal scrap reduce manufacturing costs.
- Benefits labour-intensive sectors: textiles, apparel, leather, engineering goods, pharmaceuticals, farm products.
Health, Traditional Medicine, and Agriculture
- Annex on health and traditional medicine services boosts pharmaceuticals and healthcare exports.
- Enhances India’s standing as a global health partner, ahead of China and EU competitors.
- Agriculture cooperation focuses on apples, kiwifruit, honey via technology and knowledge transfer.
Trade Utilisation and Implementation Challenges
- Bilateral trade of $2.4 billion (2024–25) projected to double by 2030.
- India’s past FTA utilisation rate remains low at ~25%.
- Challenges include awareness gaps, compliance costs, and non-tariff barriers.
- FTA includes provisions for regulatory cooperation, streamlined customs, transparency.
Way Forward and Strategic Value
- CII emphasises industry–government collaboration for effective utilisation.
- Focus beyond tariffs on services, skills, education, diaspora networks.
- Builds on India’s skilled workforce, growing middle class, innovation-led economy.
- Strengthens India’s push towards a $7 trillion economy by 2030.
- Marks India’s economic partnerships with all RCEP members except China.
- Reflects growing strategic trust and enhances India’s credibility in global trade negotiations.