India-New Zealand FTA: A Strategic Move to Counter US Trade Disruption

According to an article in South Africa's Independent Online (IOL), the FTA is a "leap forward in right-setting global trade following US President Donald Trump's trade war declaration last year".

Trade between the two countries has been growing steadily in recent years. Now the FTA aims to boost it further and turn their relationship into a stronger and longer-term strategic partnership.

Total trade increased from about $900 million in 2019/20 to $1.3 billion in 2024/25. India's exports rose sharply from $379 million to $711 million, while imports from New Zealand grew more moderately from $522 million to $587 million.

While the scale of trade between the two countries has remained modest, recent trends and the structure of the agreement indicate strong potential for accelerated and sustained growth. This growth reflects increasing economic interdependence, with both economies finding mutually beneficial areas of exchange, the article points out.

India and New Zealand signed a historic free trade agreement (FTA) on April 27 that removes tariffs on 100 per cent of India's exports to New Zealand, and either sharply reduces or removes tariffs on 95 per cent of the country's imports from New Zealand.

The article also highlights that the FTA includes a provision wherein New Zealand will invest $20 billion in India over 15 years. This is in the same vein as the $100 billion investment 'commitment' the European Free Trade Association made in their FTA with India.

Besides, the FTA includes several provisions relating to the mobility of working professionals and students. New Zealand has signed an annex on student mobility and post-study work visas for the first time with any country. Under this, Indian students can work up to 20 hours per week while studying in New Zealand, with extended post-study work visas.

Further, the agreement includes a quota of 5,000 visas for skilled Indians for a stay of up to three years in the sectors of interest to India, which include AYUSH practitioners, yoga instructors, chefs, and music teachers, as well as other key sectors such as IT, engineering, healthcare, education, and construction.

Under the Working Holiday Visa programme included in the agreement, 1,000 young Indians annually can avail multiple entries in New Zealand for a period of 12 months.

India has also managed to keep several items out of the FTA, including all dairy products such as milk, cream, whey, yoghurt, and cheese, as well as farm products.

- IANS