India-New Zealand FTA talks kick off Monday

A high-level Kiwi delegation arrives in New Delhi on Monday as India and New Zealand start negotiating a free trade agreement (FTA), two people aware of the development said.

New Zealand is expected to seek greater market access for its dairy products, fruit, wool, and other goods as the two nations look to reduce dependence on traditional markets and diversify trade partnerships.

Mint was the first to report the resumption of the proposed FTA talks in June 2024 and the formal launch on 16 March 2025 by New Zealand Prime Minister Christopher Luxon during a visit India.

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“The team from New Zealand is coming to begin the first round of face-to-face talks to expedite the bilateral negotiations and work towards a consensus on broader terms of reference for a mutually beneficial trade pact,” said the first of the two people mentioned above on the condition of anonymity.

“The key points to be discussed during the talks will include better market access for Indian goods, mobility of Indian professionals, and the creation of supply chain facilities to facilitate trade," this person said.

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The strategic move marks a broader effort by both sides to diversify trade partnerships and reduce dependence on traditional markets. The US has imposed an additional 10% tariff on imports from India and New Zealand, effective 5 April.

New Zealand's trade is primarily centred around agricultural products, education services and technology. The country exports dairy products, wool and fruits to India, while India exports pharmaceuticals, textiles and information technology services to New Zealand.

India-New Zealand trade in 2023-24 stood at just $873.4 million. India’s exports to New Zealand stood at $538.33 million, while imports were valued at $335.07 million.

Exports to New Zealand rose from $441.56 million during April–January in 2023-24 to $583.99 million in the corresponding period of 2024-25, registering a growth of 32.26%, showed the latest available data.

India’s imports of fresh cheese from New Zealand surged 500%, from $0.03 million in April-January of 2023-24 to $0.18 million during the same period in 2024-25. Imports of kiwis and apples also remained strong, reflecting steady demand for New Zealand’s fresh produce in the Indian market, showed the commerce ministry data. 

Currently, over 700 trade lines are operational between India and New Zealand.

“Market access for dairy products is New Zealand’s top priority and is part of the talking points. We are initiating the talks as both nations are keen on signing a mutually beneficial deal. On dairy, we have made it very clear from the beginning that India has reservations on the issue," said the second person mentioned above on the condition of anonymity.

“However, there are several other dairy products that we are already importing without affecting the interests of Indian farmers. These talks will help both sides understand each other’s concerns and work toward a constructive resolution,” added the second person.

Talks began in April 2010. However, after 10 rounds of negotiations, discussions stalled in February 2015 due to disagreements over market access and trade priorities.

The key challenges in negotiating a comprehensive FTA between India and New Zealand would revolve around the Kiwis’ insistence on increased dairy access, a point India has consistently resisted to protect its farmers, said Dattesh Parulekar, assistant professor of international relations at Goa University.

In earlier discussions, India had opposed reductions in tariffs on dairy, meat and wine, while New Zealand had been unwilling to provide India with broader access for its professionals.

“India would seek greater access for its agricultural products, textiles and information technology services. India has also sought better market access for its grapes,” said Parulekar.

Queries sent to the Union commerce ministry and the New Zealand Embassy remained unanswered until press time.

India has already signed FTAs with several countries, such as Japan, South Korea, Australia and the European Free Trade Association (EFTA). 

New Delhi is also negotiating FTAs with Oman and economic blocs like Association of Southeast Asian Nations (Asean) and the European Union.

On 12 August 2024, Mint reported that India had sought early market access for its grape exports to New Zealand, along with approval for vapour heat treatment (VHT) facilities in Delhi and Lucknow, which are used to eliminate pests.