India-New Zealand FTA Kicks In With Rs 35,000 Crore Trade Target: Key Segments, Sectors To Benefit, What Gets Cheaper?

The India-New Zealand Free Trade Agreement (FTA) has been implemented on October 20, thus opening new trade, education and travel opportunities for businesses in both countries. 

The FTA features a $20 billion investment from New Zealand into India over 15 years, and aims at doubling bilateral trade in goods and services to Rs 35,000 crore by 2030.

The deal also offers duty-free access for Indian exports to New Zealand while lowering or tarnishing import duties on some New Zealand products entering India, including sheep meat, kiwifruit, apples and mānuka honey.

The deal aims to bolster bilateral trade, expand market access and establish opportunities for exporters, students and professionals. However, not every imported product will become cheaper instantly, as some concessions are subject to quotas, minimum import prices and phased tariff removals. 

Which New Zealand Products Could Get Cheaper in India?

Sheep meat is among the products benefiting from instant tariff reductions, with customs duties lowered to zero. This could make New Zealand lamb more competitive in India, although final retail prices will also rely on transportation, distribution and other costs.

Meanwhile, Kiwifruit will secure preferential access under a specialised import quota, with minimal duties also applying to supplies outside the quota. Apples will receive lower tariffs within specified limits, while duties on mānuka honey will be lowered gradually over five years.

Wine tariffs will also decline over time, with the intensity of reductions relying on the product's value. These revisions could broaden consumer choice, although the impact on retail prices will vary by product and supplier.

India has also retained protections for sensitive domestic sectors, including dairy products, sugar and severelated ral agricultural commodities, thus restricting the impact on these industries.

Which Indian Sectors Could See Major Gains from the FTA?

Several Indian businesses stand to benefit massively from the deal. Reportedly, This could open up access to $6-billion market for Indian exporters, with pharmaceuticals, gems and jewellery, machinery and manufactured goods among the major beneficiaries. Indian exports to New Zealand will receive zero-duty access from day one, covering engineering goods, textiles, apparel, leather, footwear, pharmaceuticals, gems and jewellery, and processed foods.

Small businesses and manufacturers could get a competitive edge, attract new buyers and extend overseas sales. Reduced trade barriers may also help Indian exporters compete more effectively in the New Zealand market.

The agreement also aims to encourage investment and cooperation between the two countries. New Zealand has committed to facilitating $20 billion in investment in India over 15 years, potentially supporting businesses, infrastructure and employment.

Which Indian Segments would Benefit?

Students, professionals and entrepreneurs could deverive leverage from the deal covering mobility, education and business cooperation. Enhanced access for skilled workers, student and work visas, and opportunities for startups may elevate people-to-people connections and commercial relations.