Christopher Luxon, the Prime Minister of New Zealand, announced on Monday that the free trade agreement between India and New Zealand (FTA) has been finalized and is set to come into effect next month. This agreement moved closer to implementation after being approved by the New Zealand Parliament on September 16.
New Opportunities for Exports
The Prime Minister of New Zealand stated in a post on social media platform X that this agreement will create more opportunities for exporters, support business growth, and increase incomes in the country. He said: "Almost three years ago, I committed to securing a free trade agreement with India during my first term. Today we have finalized this agreement, which will come into effect next month. It is exciting to think about how many businesses will grow because of this agreement."
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Details of the Agreement and Its Impacts
This agreement was approved by a vote of 93 to 29 in the New Zealand Parliament, with support from the ruling National Party and the Labour Party. Luxon stated at the time of the agreement's approval that it provides greater access to the Indian consumer market and will help New Zealand's economic growth. He added: "People told me that a free trade agreement with India was impossible, but today this agreement was passed in Parliament. This is a historic agreement that means more jobs and higher incomes for New Zealanders. This agreement opens the doors of 1.4 billion Indian consumers to New Zealand products."
The free trade agreement allows New Zealand to provide duty-free access for 100% of Indian exports to its market. Additionally, this agreement addresses improving competitiveness and job opportunities in Indian user sectors including textiles, leather, and jewelry. In this regard, New Zealand has committed to investing $20 billion in India over the next 15 years to strengthen economic cooperation between the two countries.
For New Zealand's exports to India, 70.03% of tariff lines are included for market access, covering 95% of bilateral trade. India has excluded 29.97% of tariff lines, including sensitive products such as dairy, certain agricultural products, and sugar. Furthermore, this agreement includes the immediate elimination of tariffs for 30% of tariff lines covering products such as wood, wool, and sheep meat.
The agreement also creates new opportunities for Indian students and professionals. It includes a temporary work visa pathway with a quota of 5,000 skilled Indians for stays of up to three years. Additionally, a working holiday visa agreement allows 1,000 young Indians to travel to New Zealand each year.
The India-New Zealand free trade agreement, which also includes cooperation in investment, research and innovation, technology, and renewable energy, is now moving closer to implementation following the approval of the New Zealand Parliament and will cover trade in goods and services, investment, agriculture, and customs procedures.
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