India-New Zealand FTA expected to boost trade diversification strategy | Economy & Policy News

India’s free-trade agreement (FTA) with New Zealand, set to come into force on Tuesday, is expected to expand bilateral trade and advance New Delhi’s diversification strategy amid geopolitical uncertainties. It is India’s second trade deal in the Oceania region, after Australia.

Annual trade with New Zealand has so far remained modest at around $1.2 billion. Tariff concessions under the agreement are expected to widen the trade basket, as the two countries aim to double bilateral trade by 2030.

New Zealand has offered zero-duty access from day one to Indian pharmaceuticals, marine products, textiles, chemicals, leather and footwear, gems and jewellery, and electronic goods. It has also committed to eliminating tariffs on engineering goods, plastic articles and farm products.

The concessions come as India’s exports to New Zealand have declined for two consecutive financial years. Shipments fell nearly 3 per cent year-on-year to $192.53 million in April-July, according to the latest country-wise data from the Department of Commerce.

The agreement also includes an investment commitment of $20 billion by New Zealand over 15 years.

India, meanwhile, has offered duty concessions on 70 per cent of tariff lines, covering 95 per cent of New Zealand’s export value to the country, while keeping sensitive domestic industries outside tariff liberalisation. Gems and jewellery, copper articles, dairy products, vegetables, sugar and artificial honey are among the excluded products.

India has offered conditional concessions on Manuka honey, wine, kiwi and milk albumin under tariff-rate quotas (TRQs).

On Saturday, the Ministry of Finance published the first batch of tariff concessions for New Zealand goods under the FTA. The preferential rates, covering products including wine, Manuka honey, kiwi and sheep meat, will take effect on Tuesday.

According to the notification, qualifying kiwi consignments priced at or above $2.50 per kg will attract a basic customs duty (BCD) of 15 per cent. Milk albumin has been allocated a TRQ of 200 metric tonnes at a reduced in-quota duty rate of 10 per cent.

Manuka honey with a cost, insurance and freight value of $30 per kg or above will attract a concessional BCD of 51 per cent, subject to certification from New Zealand’s Ministry for Primary Industries. Eligible consignments have been granted a TRQ of 40 metric tonnes.