What is the India-New Zealand Free Trade Agreement?
GS2Polity · Governance · IR· India's bilateral relations· Prelims + Mains·
Why in news
India and New Zealand concluded a Free Trade Agreement (FTA) in December to boost economic cooperation and diversify trade partners following US tariffs on Indian exports.
Background
The FTA grants New Zealand zero duty on all Indian exports and targets $20 billion in FDI by 2030. India receives duty-free access to 95% of New Zealand imports, with specific provisions for Ayurveda, yoga, and traditional medicine services.
Facts for Prelims
- FactNew Zealand is granted zero duty on all Indian exports under the new FTA.
- FactIndia receives duty-free access to 95% of New Zealand imports.
- FactThe agreement targets $20 billion in FDI from New Zealand by 2030.
- FactThe FTA includes specific provisions to facilitate trade in Ayurveda, yoga, and traditional medicine services.
For Mains
Q. Examine how bilateral Free Trade Agreements can help India diversify its trade partners and mitigate the impact of unilateral trade barriers from major economies.
Dimensions to cover in your answer
- Asymmetric gains: Concerns over trade deficits and the exclusion of sensitive dairy and agriculture products from the deal.
- Domestic competitiveness: Requirement for Indian exporters to meet international quality standards to sustain market share.
- Strategic diversification: Reducing over-dependence on traditional trade partners to insulate the economy from external tariff shocks.
Keywords: Trade Diversification · Asymmetric Trade · FDI Inflow · Market Access · Trade Deficit
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