Why in the News?
India has signed a Free Trade Agreement with New Zealand in 2025. The agreement is being highlighted as one of the fastest negotiated FTAs by India and is expected to come into force after ratification by the New Zealand Parliament. It reflects India’s push for deeper global trade engagement and supply chain diversification.
What is a Free Trade Agreement (FTA)
- A Free Trade Agreement is a pact between countries to reduce or eliminate tariffs and other trade barriers on goods and services, thereby promoting trade and investment.
Key Features of the Agreement
- New Zealand will eliminate tariffs on all goods imported from India.
- India will remove or reduce tariffs on about 95 percent of imports from New Zealand.
- The agreement was signed by Commerce Minister Piyush Goyal and his New Zealand counterpart.
Tariff Structure
- Immediate elimination
- Wood and wool
- Raw leather hides
- Phased elimination
- Petroleum oils
- Vegetable oils
- Electrical machinery
- Tariff reduction
- Wine
- Pharmaceuticals
- Iron, steel and aluminium products
Sensitive Sector Exclusions
India has excluded several key sectors to protect domestic interests
- Dairy products such as milk, cheese and yoghurt
- Agricultural items like onion, pulses, corn and almonds
- Sugar and artificial honey
- Copper and aluminium products
- Animal products except sheep meat
Trade and Investment Aspects
- India’s exports to New Zealand reached 711.1 million dollars in 2024 to 25
- Imports from New Zealand reached 587.1 million dollars
- New Zealand has committed to facilitate 20 billion dollars investment in India over 15 years
Additional Provisions
- Mobility for students and skilled professionals
- Boost to services such as IT, education, healthcare and engineering
- Support for MSMEs, farmers and manufacturing sectors
| [2017] ‘Broad-based Trade and Investment Agreement (BTIA)’ is sometimes seen in the news in the context of negotiations held between India and: (a) European Union (b) Gulf Cooperation Council (c) OECD (d) SCO |
