Editorial: Now the Hard Work Begins
OPINION: After much wrangling, the Free Trade Agreement (FTA) between New Zealand and India is a step closer to fruition.
Yesterday, Trade and Investment Minister Todd McClay and India's Minsiter for Commerce and Industry Piyush Goyal met in New Delhi and signed the agreement in front of a crowd of New Zealand and Indian businesspeople.
The deal eliminates or reduces tariffs on 95% of New Zealand's exports to India.
It ensures that close to 57% of New Zealand exports will be duty free from day one of the deal, including lamb, wool and forestry.
This will increase to 82% when fully implemented including infant formula, a kiwifruit quota almost four times the current exports and seafood.
The remaining 13% including kiwifruit, apples, mānuka honey, wine and some dairy products is subject to sharp tariff cuts.
Widespread Benefits
New Zealand Prime Minister Christopher Luxon says the benefits of the deal are widespread, adding that the country's business community is excited to see the doors open to 1.4 billion people in an economy set to become the world's third largest.
"One in four jobs are tied to trade," Luxon says.
"In signing this FTA we are setting businesses up to succeed, boosting Kiwi jobs and enabling economic growth – and that means more money in Kiwis’ pockets.”
Deal Supports Goal to Double Export Value - McClay
McClay says the FTA supports New Zealand's goal to double the value of exports in 10 years.
"This deal will deliver thousands of jobs and billions of dollars in additional exports," he says.
“Creating opportunities for our businesses to diversify and create strong trading relationships provides economic security for New Zealanders – and that is crucial in these times of global unrest.”
Most Favoured Nation
The Government argues the signing ensures that New Zealand is on track to benefit from a Most Favoured Nation clause for wine and services exports, meaning Kiwi exporters will have better access if the deal comes into force before the European Union's deal.
“That clause will be worth tens of millions of dollars in extra exports for the New Zealand economy,” Luxon says.
“Two-way trade is currently NZ$3.95 billion. The deal we have struck and the relationship we have built will grow this exponentially and deliver deep and lasting benefits for generations to come.”
Red Meat Sector Reacts
New Zealand's red meat sector says it welcomes the signing of the FTA and its potential to unlock opportunities over time.
Meat Industry Association (MIA) chair Nathan Guy says that once ratified, the FTA will expand New Zealand red meat exporters’ trade options in a challenging global environment.
“Exporters are operating in a world of rising protectionism and ongoing volatility. Having a broader mix of markets and expanding our reach will help spread risk and provide more stability for farmers and exporters," Guy says.
“India is a market with significant long-term potential. While we won’t see immediate gains, this FTA charts a path to improve market access and create new opportunities for the red sector.”
Meanwhile, Beef + Lamb New Zealand chair Kate Acland says the agreement positions New Zealand in a market with strong promise.
“India is now the world’s most populous country and is expected to become the third-largest economy within the next five years. As incomes rise in India, so will demand for high-quality natural protein.
“Access has been constrained due to a 30 per cent tariff on New Zealand sheepmeat. This FTA will start the process of addressing those barriers and puts us in a stronger position as the market develops.
“The FTA can help build the red meat sector’s resilience and enable us to keep delivering for the New Zealand economy.”
NZFOA Welcomes Deal
The New Zealand Forest Owners Association (NZFOA) has also joined the chorus of primary sector voices welcoming the deal.
Elizabeth Heeg, NZFOA chief executive, who was in India for the signing says it is an honour to witness the progress of an agreement with such significant potential for New Zealand forestry.
“Forest growers welcome the signing of this agreement. India is a large, fast-growing economy and an increasingly important partner for New Zealand.
"Wood and wood products are already New Zealand’s largest goods export to India, worth NZ$134 million in the year to June 2025, giving our sector a strong base to build from.
"Improved access to the Indian market gives forest growers, wood processors and exporters greater confidence to invest, grow trade and support jobs across the forestry supply chain.”
What's Next?
The deal is set to be ratified by the Government later this year following much political debate.
Signing of the FTA activates the standard parliamentary process, allowing Parliament and the public to scrutinise the agreement through the Select Committee. The FTA text and National lnterest Analysis will be tabled in Parliament today and referred to the Foreign Affairs, Defence and Trade Committee (FADTC).
Once FADTC has completed its examination, enabling legislation will be introduced and will follow the usual legislative process. This approach is consistent with that taken for the TPP, CPTPP, and agreements with the United Kingdom, European Union, and United Arab Emirates.
