India-New Zealand Free Trade Agreement (FTA)
India has signed a Free Trade Agreement (FTA) with New Zealand, marking a significant step in recalibrating its foreign-trade policy.
Key Provisions of the FTA
- Duty-Free Access: All Indian goods will receive duty-free access to the New Zealand market.
- Import Provisions: A large portion of India's imports from New Zealand will be opened up with significant tariff cuts and expanded quotas on certain goods such as lamb and kiwi fruit.
- Sector Protection: Indian messaging emphasizes protection for sensitive sectors, notably excluding dairy from tariff reductions due to its economic and political sensitivity in India.
Investment Commitments
- New Zealand has committed to investing $20 billion in India over the next 15 years.
- This mirrors a similar promise by the European Free Trade Area, which pledged $100 billion.
- India's market access conditions are linked to such investment commitments, necessitating reforms in business and investor-friendly practices, including judicial and arbitration reforms.
Movement of Individuals
- The agreement allows up to 5,000 Indian professionals to be granted three-year work permits in New Zealand, particularly in sectors like health care and information technology.
- This provision is relatively rare given the global climate towards immigration restrictions.
Strategic Implications
- New Zealand is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with which India now has FTAs with eight out of twelve members.
- The agreement with New Zealand could prompt India to consider candidacy for the CPTPP, enhancing geopolitical and geo-economic alliances.
- Maintaining momentum in signing FTAs, including reconsidering tariff reductions, is crucial for India's trade policy alignment with global standards.
