India and New Zealand FTA Agreement

India-New Zealand Free Trade Agreement (FTA) Summary:

Bilateral Trade Goals:

• Aim to double bilateral trade from $1.3 billion (2024-25) in the next five years.
• Concluded negotiations on the FTA expected to be signed within 2-3 months after legal reviews.

Key Highlights of the FTA:

• India will reduce tariffs on 95% of products exported from New Zealand.
• New Zealand will eliminate tariffs on 100% of its tariff lines for Indian exports.
• New Zealand's average import tariff is 2.3%, while India’s is 16.2%, showing a disparity favoring New Zealand.
• New Zealand plans to invest $20 billion in India over the next 15 years as part of this deal.

Visa and Mobility Provisions:

• Removes numerical caps on Indian students and guarantees 20 hours of work per week during studies.
• Extended post-study work opportunities:
  • 3 years for Bachelor's and Master's graduates in STEM.
  • 4 years for Doctorate holders.
• Introduces a Temporary Employment Entry (TEE) Visa for 5,000 Indian professionals across skilled sectors (IT, healthcare, etc.).

Economic Implications:

• Strong push for job creation and expansion of business opportunities.
• Concerns from New Zealand's political factions about the deal being “neither free nor fair”, especially concerning immigration and dairy concessions.
• Notably, dairy products remain excluded from tariff reductions for India.

Regulatory and Cooperation Aspects:

• The FTA will address non-tariff barriers with provisions for improved regulatory cooperation and streamlined customs protocols.
• Cooperation will also extend to sectors such as AYUSH, culture, fisheries, tourism, and traditional knowledge systems.

Strategic Significance:

• India seeks to enhance its access to a high-income, rules-based Pacific market.
• New Zealand aims to diversify its exports including dairy and horticulture.

Ministerial Statements:

• Prime Minister Narendra Modi describes the FTA as a historic milestone reflecting robust bilateral relations.
• Commerce Minister Piyush Goyal highlights the FTA as a conduit for Indian businesses in the region and boosts global skills development.

Comparison with Other Trade Agreements:

• The FTA with New Zealand comes after recent agreements with Oman and the UK.
• Indicates India's active pursuit of trade agreements amidst stalled talks with larger partners like the US.

Future Outlook:

• The implementation will require passage through New Zealand's Parliament, estimated to take at least six months post-signing.
• Both nations are optimistic that the FTA will significantly enhance economic ties and trade volumes.

This FTA signifies a strategic move for both nations to capitalize on each other’s economic strengths and broaden their trade landscape amidst global uncertainties.