Resumption of India-New Zealand Free Trade Agreement Negotiations
India and New Zealand have announced the resumption of negotiations for a proposed Free Trade Agreement (FTA) after discussions were stalled in 2015. The initial negotiations for the Comprehensive Economic Cooperation Agreement (CECA) began in April 2010 but stopped after nine rounds, with the last round in 2013 due to differences in sensitive areas like dairy and agriculture.
Renewed Negotiations
The announcement came ahead of a bilateral meeting between Indian Prime Minister Narendra Modi and New Zealand Prime Minister Christopher Luxon, who visited India from March 16 for four days. The aim is to establish a comprehensive and mutually beneficial FTA to enhance supply chain integration and market access.
- Both countries are committed to building a bilateral relationship encompassing trade and investment.
- A meeting between Indian Commerce and Industry Minister Piyush Goyal and New Zealand's Minister for Trade and Investment Todd McClay marked this significant step.
Bilateral Trade Overview
The bilateral trade between the two countries has been growing and surpassed $1 billion during April-January 2025. The FTA aims to unlock new business opportunities and foster mutual growth.
- India's goods exports to New Zealand in April-December FY25 amounted to $494.44 million, with pharmaceuticals, nuclear reactors and boilers, and textiles being the key exports.
- India's imports from New Zealand were $463.07 million, including fruit and nuts, mineral fuels and oils, wood and articles, iron and steel, and machinery.
Key Concerns and Historical Context
New Zealand, a major exporter of dairy products, has been keen to access the Indian market for selling milk powder and dairy products. However, India has opposed this due to concerns within its domestic dairy industry.
- India fears that including dairy products in the trade pact would compel the country to grant greater market access, impacting the domestic dairy sector.
- India and New Zealand were part of the Regional Comprehensive Economic Partnership (RCEP), but India exited in 2019 due to unmet concerns regarding trade deficits with China.