India and New Zealand have concluded the first round of Free Trade Agreement (FTA) negotiations, aiming to increase trade tenfold over the next decade. Discussions centered on dairy access, tariff disparities, and the movement of skilled professionals. Both nations aim to finalize the agreement within 60 days, despite the intricate negotiations around sensitive sectors.
India's imports from New Zealand include agricultural products, apples, and kiwifruit. The bilateral trade was valued at $1.2 billion in April-February 2024-25, with India's exports at $644 million and imports at $546 million.
The first attempt at an FTA between these countries spanned from 2010 to 2015, involving ten negotiation rounds. A significant hurdle remains New Zealand's demand for access to Indian dairy markets. India has traditionally kept its dairy sector protected in previous FTAs, as seen in the recent India-UK FTA.
India's dairy imports from New Zealand are minimal, around $0.57 million, and while limited imports of value-added dairy products might be considered, India opposes raw dairy imports. India is also hesitant to lower tariffs on New Zealand's meat and wine exports. Conversely, India seeks easier movement for its skilled professionals and better access for its IT and services sector, similar to arrangements with Australia and China, which New Zealand has not agreed to.
Ajay Srivastava, founder of Global Trade Research Initiative, noted, "A major challenge in the renewed talks will be the disparity in tariff structures. New Zealand's average import tariff is only 2.3%, with over half of its tariff lines already duty-free, meaning Indian goods already have substantial access to its market. In contrast, India's average tariff stands at 17.8%, meaning it would have to make significant reductions, making a traditional FTA less attractive for India."
Source: Financial Express