On Monday, India and New Zealand inked a historic Free Trade Agreement (FTA), which removed or reduced tariffs from 95% of New Zealand’s imports and allowed duty-free access to all of India’s exports.
After a record-breaking nine months of discussions, the deal was finalised in the presence of Todd McClay and Piyush Goyal, the ministers of commerce of India and India’s equivalent.
Textiles, leather, carpets, ceramics, and automobile components are among the important Indian exports that will have their current tariffs of up to 10% eliminated under the agreement, making India’s exports more competitive. New Zealand has also committed to investing $20 billion over 15 years as part of the pact. By keeping dairy and other important agricultural products out of the deal, India has protected vulnerable industries.
Cities like Agra, which produces over 75% of India’s leather shoes, are likely to reap the most benefits from the FTA for the country’s leather industry. The elimination of taxes on leather goods has put exporters in a prime position for rapid expansion.
The agreement also establishes a specific chapter on health and traditional medicine, which helps to expedite the clearance process for medical devices and medicines by recognising and accepting international standards.
Trade, investment, and the mobility of workers between the two countries have all been greatly enhanced by the India-New Zealand FTA, which has also opened up new opportunities for growth in several important industries.
Image Credit: Fortune India
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