In what is being billed as a "landmark moment in the India-New Zealand partnership", the two countries signed a free trade agreement (FTA), aimed at boosting commerce and investments between the two partners.
The FTA provides duty-free access for 100 per cent of India's exports to New Zealand, covering all tariff lines or produce categories.
It is expected to significantly boost MSMEs and employment by enhancing competitiveness in labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.
Earlier, New Zealand used to impose peak tariffs of up to 10 per cent on several key Indian exports, including ceramics, carpets, automobiles, and auto components.
With zero-duty market access coming into effect, similar to what New Zealand offers its other trade partners, Indian products will now be fully competitive in that market, benefiting from a level playing field.
Importantly, India has also secured duty-free access to critical inputs for its manufacturing sector, such as wooden logs, coking coal, and metal waste and scrap. This is expected to reduce production costs and boost the global competitiveness of the Indian industry.
India has offered tariff liberalisation on 70.03 per cent of tariff lines covering 95 per cent of bilateral trade value, while keeping 29.97 per cent of tariff lines excluded to protect India's sensitive sectors.
The products that are kept in exclusion are mainly dairy (milk, cream, whey, yoghurt, cheese etc.), animal products (other than sheep meat), agricultural products (onions, chana, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, arms and ammunition, gems and jewellery, copper and articles thereof (cathodes, cartridges, rods, bars, coils), aluminium and articles thereof (ingots, billets, wire bars) among others.
New Zealand products which enjoy tariff reductions include wine, pharmaceutical drugs, polymers, aluminum, iron and steel articles, and goods that only 0.06 per cent fall under tariff rate quotas, including Manuka honey, apples, kiwi fruit, and albumins, including milk albumin.
The FTA also includes a commitment to facilitate $20 billion in investment into India.
PM Modi said will greatly benefit farmers, youth, women, MSMEs, startups, and students, among others.
Modi also said that the investment commitment of USD 20 billion by New Zealand will further strengthen the bilateral cooperation in agriculture, manufacturing, innovation and technology, paving the way for a more prosperous and dynamic future for both countries.
"Today marks a landmark moment in the India-New Zealand partnership! I am delighted that the India-New Zealand FTA signed today will add unprecedented momentum to our developmental partnership. It reflects the deep trust, shared values and ambition that bind our two nations," he said in a post on X.
"This agreement will greatly benefit our farmers, youth, women, MSMEs, artisans, startups, students and innovators. It will open new avenues for growth, create opportunities and deepen our synergy across sectors," the prime minister said.
