India and New Zealand have announced resumption of negotiations for a proposed free trade agreement, after it was stalled in 2015.

• The announcement came during the four-day visit of New Zealand’s Prime Minister Christopher Luxon to India.

Background of the Agreement

• India and New Zealand began negotiations for the Comprehensive Economic Cooperation Agreement (CECA) in April 2010 to enhance trade in goods, services, and investment. 
• However, after nine rounds of discussions, the talks were stalled in 2015 due to unresolved issues.

Objectives of the India-New Zealand FTA

• Enhance supply chain integration between both nations.
• Improve market access for goods and services.
• Strengthen bilateral trade and investment ties through a balanced and mutually beneficial agreement.

Significance of the FTA Negotiations

• The FTA aims to strengthen trade relations between the two nations by improving market access and increasing supply chain integration.
• The renewed discussions will focus on achieving balanced and mutually beneficial trade outcomes.

What is a Free Trade Agreement (FTA)?

• An FTA is a trade deal between two or more countries that reduces or eliminates import duties on most goods (90-95%).
• It also minimizes non-tariff barriers and simplifies regulations to improve trade in services and investments.

How does FTA work?

• It is implemented by formal and mutual agreement between the nations to promote trade without restrictions such as tariffs, quotas, or other trade barriers.
• Nations involved in FTAs do not completely eliminate trade regulations but agree on terms that simplify imports and exports. 
• It simplifies trade procedure freely while maintaining some level of government oversight. 

Key Areas of Cooperation between India and New Zealand

• Defense and Security Collaboration:
  • Institutionalizing Defense Ties: Both nations will strengthen and institutionalize defense and security collaboration, including joint military exercises, training programs, and port visits.
  • Maritime Security: Both navies are already cooperating in the Combined Task Force-150, focusing on maritime security in the Indian Ocean.
  • Defense Industry Roadmap: A roadmap for bilateral defense industry collaboration will be developed to enhance mutual capabilities.
• Counter-Terrorism Cooperation:
  • Shared Challenges: Both nations have shared experiences in combating terrorism, referencing the 26/11 Mumbai attacks and the Christchurch mosque shootings in 2019.
  • Addressing Anti-India Activities: New Zealand has assured full cooperation in addressing India’s concerns about anti-India activities, particularly pro-Khalistan activists.
• Diplomatic and Community Ties:
  • Increased Diplomatic Presence: New Zealand plans to expand its diplomatic presence in India by more than 60%, reflecting its commitment to deepening ties.
  • Indian Community in New Zealand: Indian community  is the third-largest ethnic group in New Zealand, and contributes significantly to the country’s economy and culture.
• Geopolitical Context: 
  • Indo-Pacific Focus: Both countries believe in the importance of a rules-based order in the Indo-Pacific region, amidst growing geopolitical tensions.
• Future Engagements: 
  • Raisina Dialogue: New Zealand PM delivered the keynote address at the annual Raisina Dialogue in New Delhi, focusing on global geopolitical challenges.
  • Mumbai Visit: Following his stay in Delhi, PM Luxon will visit Mumbai to tour the Indian naval ship INS Surat and the Royal New Zealand ship HMNZS Te Kaha, which is docked in Mumbai.

Conclusion

The revival of FTA negotiations marks an important step in deepening economic ties between India and New Zealand. Both nations are committed to enhancing trade cooperation, ensuring fair and beneficial trade practices, and fostering stronger economic growth through the agreement.

DOWNLOAD PDF