India New Zealand FTA talks: "Education and research are areas where we must focus because that's what brings people closer to each other," said Piyush Goyal
India and New Zealand have set a target to conclude a comprehensive Free Trade Agreement (FTA) within 60 days, assured India's Commerce & Industry Minister Piyush Goyal and New Zealand Prime Minister Christopher Luxon. Both countries are aiming to increase bilateral trade by 10 times over ten years through this FTA.
"Let's drive this relationship forward, and I look forward to Prime Minister Modi signing that agreement in 60 days' time," Luxon said while addressing the India-New Zealand Economic Summit organised by industry body FICCI.
After a decade-long hiatus, India and New Zealand have resumed FTA talks last week. However, New Zealand’s push for greater access to India’s dairy market has always remained a point of contention during previous talks. Both the countries refrained from commenting on their negotiations about the sectors. At present, India's dairy imports from New Zealand are negligible, amounting to just $0.57 million. While India may be open to limited imports of value-added dairy products, it remains steadfast in its opposition to raw dairy imports.
“We are very aspirational. I don't think any of you imagine that we could do the UAE agreement in 90 days. So, we are an aspirational two friends working together in a spirit of cooperation, respecting each other's sensitivities, and we will be aspiring to do this equally fast,” said Piyush Goyal.
While both countries are yet to discuss on the sectors that will be incorporated under the FTA, Goyal advised that sectors like tourism, education and research will be the prime focus of the agreement.
“India will certainly play a very important role in expanding the relationship between our two countries,” added Goyal. Both countries are aiming to explore areas like food processing, pharma, renewable energy, critical minerals, forestry, and horticulture for better investment opportunities. He further said, “Education and research are areas where we must focus because that's what brings people closer to each other. The huge amount of opportunity that innovation that comes out of New Zealand can reach the whole world through India, manufacturing in India, producing in India for the world at competitive prices can help us take this partnership to greater heights.”
Another key issue was India’s demand for easier movement of its skilled professionals and better access for its IT and services sector. India wanted New Zealand to grant work opportunities similar to those given to Australia and China, but New Zealand did not agree. However, Goyal said, “Our effort to create more connectivity in the financial world, in the digital world, our effort for swift mobility of manpower and technical talent, our STEM graduates, India produces the highest number of STEM graduates every year.”
As highlighted by think tank Global Trade Research Initiative (GTRI), a major challenge in the renewed talks could 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.
According to trade experts, the tricky point in the talks would be duty concessions on agri products like apple, kiwi, dairy, and wine. India and New Zealand began negotiating the Comprehensive Economic Cooperation Agreement (CECA) in April 2010 to boost trade in goods, services, and investment. However, after nine rounds of discussions, the talks stalled in 2015.