India Approves Trade Agreement with New Zealand to Boost Ties

India’s Union Cabinet has approved a trade agreement with New Zealand, as confirmed by sources familiar with the situation. This decision paves the way for India to sign the trade deal, which will mark the country’s seventh trade pact since 2021. The agreement is part of India’s broader strategy to diversify its trade relationships amid global economic shifts.

India’s exports to New Zealand primarily consist of medicines, precious metals and gems, textiles, and agricultural machinery. In contrast, New Zealand exports key products to India, including iron and steel, aluminium, and various agricultural goods such as apples, kiwi fruit, and lamb.

Resumption of Trade Talks

After a hiatus of nearly a decade, India and New Zealand resumed discussions for a comprehensive free trade agreement (FTA) in March 2024. Initial negotiations began 14 years ago but stalled following ten rounds of talks, with no formal discussions occurring since February 2015. Recent reports indicate that negotiations are approaching completion, a sentiment echoed by Indian government officials.

New Zealand’s Trade Minister, Todd McClay, visited New Delhi last week to evaluate the progress of the agreement with India’s Minister of Commerce and Industry, Piyush Goyal. Following their discussions, Commerce Secretary Rajesh Agrawal expressed optimism, stating, “We are in a good zone where we hope that the agreement will be closed and finalized soon.”

Trade Flows and Key Sectors

In 2024, India’s total exports of goods and services to New Zealand reached $752 million, while imports amounted to $791 million. Notably, merchandise exports were valued at $538 million, compared to imports of $335 million during the same period.

India’s service exports to New Zealand are led by information technology and software services, as well as telecommunications that support New Zealand’s digital infrastructure. New Zealand, in turn, exports services in education, tourism, and fintech to India.

The approval of this trade agreement reflects India’s commitment to strengthening its economic ties with New Zealand and enhancing its presence in the Asia-Pacific region.