India and New Zealand have officially inked a landmark Free Trade Agreement, poised to significantly boost bilateral commerce, investment, and provide duty-free access for a wide range of Indian exports while securing crucial inputs for India’s manufacturing sector.
India and New Zealand on Monday inked a free trade agreement, aimed at boosting two-way commerce and investments.
The pact was signed by Commerce and Industry Minister Piyush Goyal and visiting New Zealand’s Trade and Investment Minister Todd McClay.
Boosting Indian Exports and MSMEs
The FTA provides duty-free access for 100 per cent of India’s exports to New Zealand, covering all tariff lines or produce categories, and is expected to significantly boost MSMEs and employment by enhancing competitiveness in labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.
Earlier, New Zealand maintained peak tariffs of up to 10 per cent on key Indian exports, including ceramics, carpets, automobiles, and auto components.
With zero-duty market access from entry into force as New Zealand’s other trade partners, Indian products will be fully competitive in that country, enjoying a level playing field.
Strategic Input Sourcing for India
Significantly, India also secured duty-free inputs for its manufacturing sector, including wooden logs, coking coal, and waste and scraps of metals, lowering production costs and enhancing the global competitiveness of the Indian industry.
On the other hand, India has offered tariff liberalisation on 70.03 per cent of tariff lines covering 95 per cent of bilateral trade value, while keeping 29.97 per cent of tariff lines excluded to protect India’s sensitive sectors.
The products that are kept in exclusion are mainly — dairy (milk, cream, whey, yoghurt, cheese etc.), animal products (other than sheep meat), agricultural products (onions, chana, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, arms and ammunition, gems and jewellery, copper and articles thereof (cathodes, cartridges, rods, bars, coils), aluminium and articles thereof (ingots, billets, wire bars) among others.
Tariff Reductions and Investment Commitments
On 30 per cent of tariff lines of New Zealand, India will provide duty elimination on goods such as wood, wool, sheep meat, and leather-raw hides.
Similarly, 35.60 per cent of tariff lines are subject to phased elimination over 3, 5, 7, and 10 years, including petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery, and peptones.
