India-New Zealand FTA to take effect on October 20; all Indian exports to get duty-free access
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The India-New Zealand free trade agreement (FTA) will come into effect on October 20, Commerce and Industry Minister Piyush Goyal said on Monday, marking a major step towards strengthening trade and investment ties between the two countries.
The agreement, signed on April 27, provides duty-free access to New Zealand for 100% of Indian exports from the date of implementation. New Zealand has also committed to facilitating $20 billion in investments in India over the next 15 years.
Indian exports to get duty-free access
The pact is expected to give Indian exporters greater access to the New Zealand market by removing tariffs on goods that currently face duties of up to 10%. These include products such as ceramics, carpets, automobiles and auto components.
The minister said the immediate focus would be on ensuring that Indian businesses are able to realise the benefits of the agreement. The pact also includes an agricultural productivity partnership under which New Zealand will provide technology and expertise while India offers scale and access to its large domestic market.
New Zealand will receive preferential access to the Indian market under the agreement. However, several sensitive sectors have been kept outside the scope of tariff concessions, including dairy, onions, chickpeas, peas, corn, almonds, artificial honey, and sugar.
New Zealand Trade Minister Todd McClay described the agreement as a high-quality pact that would deliver significant benefits to businesses in both countries, particularly at a time of heightened global economic uncertainty.
Goyal said the immediate elimination of tariffs on Indian products would give exporters an advantage over competitors in the New Zealand market.
$20-billion investment commitment
The investment commitment from New Zealand is another key component of the agreement. Goyal said the planned $20 billion investment over 15 years would bring capital and technology into India's manufacturing sector and create opportunities for New Zealand companies looking to expand in the country.
India and New Zealand will also establish a dedicated mechanism to facilitate the partnership and help businesses navigate investment and trade opportunities.
Separately, Goyal said the next round of negotiations for the proposed India-Canada Comprehensive Economic Partnership Agreement (CEPA) will begin on October 5. The fourth round of talks concluded on September 18, with both sides seeking to fast-track negotiations and conclude the agreement by the end of the year.
The fifth round is expected to run for about five days, through October 9. Canada's International Trade Minister Maninder Sidhu was in Mumbai last week as part of the ongoing engagement between the two countries.