India-New Zealand FTA: New Zealand Parliament approves trade deal

Wellington: New Zealand's Parliament on Wednesday approved the legislation for the India-New Zealand Free Trade Agreement (FTA), bringing the bilateral trade pact a step closer to coming into force.

The legislation was passed by 93 votes to 29, with support from both the ruling National Party and the main opposition Labour Party.

New Zealand Prime Minister Christopher Luxon welcomed the parliamentary approval, saying the agreement would provide greater access to India's large consumer market and support economic growth in New Zealand.

The FTA was signed by India and New Zealand on April 27. India is now seeking to bring the agreement into force as soon as possible. Commerce Secretary Rajesh Agrawal had said last week that the pact could potentially become operational in October.

Under the agreement, New Zealand will provide duty-free access to 100% of Indian exports to its market across all tariff lines. The pact is also expected to support India's labour-intensive sectors, including textiles and apparel, leather and footwear, gems and jewellery, engineering goods and processed foods.

New Zealand has also committed to invest USD 20 billion in India over 15 years under the agreement, aimed at strengthening long-term economic ties.

What does the trade deal offer?

For New Zealand's exports to India, 70.03% of tariff lines have been granted market access, covering 95% of bilateral trade.

India has excluded 29.97% of tariff lines, including sensitive products such as dairy, several agricultural products, sugar and certain metals.

Duties on 30% of tariff lines covering products such as wood, wool, sheep meat and raw hides will be eliminated immediately. A further 35.60% of tariffs will be phased out over three, five, seven or 10 years.

Some products, including wine, pharmaceutical drugs, polymers and certain aluminium, iron and steel products, will receive tariff reductions. Tariff-rate quotas will apply to a limited number of products, including Manuka honey, apples, kiwifruit and albumins.

The agreement also includes agricultural cooperation in areas such as kiwifruit, apples and honey. India and New Zealand will work together on research, technical assistance, orchard management, post-harvest practices, supply chains and food safety.

New opportunities for Indian students and workers

The FTA also provides new mobility opportunities for Indian students and professionals.

A Temporary Employment Entry visa pathway will allow up to 5,000 skilled Indians to work in New Zealand for up to three years. Eligible occupations include AYUSH practitioners, yoga instructors, Indian chefs and music teachers, as well as professionals in IT, engineering, healthcare, education and construction.

Under a Working Holiday Visa arrangement, 1,000 young Indians will be able to travel to New Zealand each year for stays of up to 12 months.

The agreement also includes student mobility and post-study work provisions. Eligible Indian students will be able to work up to 20 hours a week while studying and may receive extended post-study work visas depending on their qualifications.

New Zealand has committed across 118 services sectors under the agreement and will provide Most-Favoured-Nation treatment in 139 sectors.

The pact also covers cooperation in investment, research and innovation, technology, skills, renewable energy, digital services and infrastructure.