India, New Zealand Resume Trade Talks After a Decade

Why in the News ?

After a 10-year gap, India and New Zealand have resumed negotiations for a Free Trade Agreement (FTA) to boost bilateral trade and economic ties. The talks aim to enhance market access, resolve tariff disparities, and strengthen supply chains.

Resumption of FTA Negotiations:

  • After a 10-year hiatus, India and New Zealand have resumed negotiations for a Free Trade Agreement (FTA) to enhance economic ties.
  • The Comprehensive Economic Cooperation Agreement (CECA) was first discussed in April 2010, but stalled after 10 rounds of talks in 2015.
  • The decision was announced after a meeting between India’s Commerce Minister Piyush Goyal and New Zealand’s Trade Minister Todd McClay.
  • The FTA aims to strengthen supply chain integration, improve market access, and boost bilateral trade, which surpassed $1 billion in April-January 2025.

Challenges in FTA Negotiations

  • A key challenge is tariff disparity between the two nations:
    • New Zealand’s average tariff: 3%, with over half of its imports duty-free.
    • India’s average tariff: 8%, requiring significant reductions, making the FTA less appealing for India.
  • New Zealand seeks greater access to India’s dairy market, but India opposes raw dairy imports to protect millions of farmers.
  • India has been reluctant to lower tariffs on dairy, meat, and wine, while New Zealand pushes for more favorable trade terms.

Key Issues and the Road Ahead

  • India demands easier movement of skilled professionals and better market access for IT and services.
  • External factors, including pressure from the U.S. on India’s agricultural policies, may influence negotiations.
  • Both nations must find common ground to finalize a mutually beneficial trade agreement.