The New Zealand free trade agreement with India has been making headlines in recent years. This agreement, which is currently in the negotiation stage, has the potential to bring significant benefits to both countries. Here’s what you need to know about it.

Background

New Zealand and India have been discussing the terms of a free trade agreement since 2010. Negotiations began in earnest in 2012, but progress has been slow. In 2019, talks were ramped up again, with both countries expressing a renewed commitment to reaching a deal.

Benefits for New Zealand

New Zealand’s primary objective in negotiating the free trade agreement with India is to increase its access to the Indian market. India is the world’s second-most populous country and has a rapidly growing middle class, making it an attractive market for New Zealand businesses. Dairy, meat, and horticultural products are among the items that New Zealand hopes to export to India.

In addition to increased trade, the free trade agreement could also lead to closer diplomatic ties between New Zealand and India. The two countries already have a good relationship, but a free trade agreement would strengthen it further.

Benefits for India

India, too, stands to gain from the free trade agreement. New Zealand is a major exporter of dairy products, which are in high demand in India. Other potential areas of trade include meat, wool, and kiwifruit.

In addition to the economic benefits, a free trade agreement with New Zealand could help India achieve its strategic objectives in the Asia-Pacific region. New Zealand has established relationships with other countries in the region, such as Australia and Japan, which could be beneficial to India.

Challenges

Negotiating a free trade agreement is never easy, and the talks between New Zealand and India have been no exception. One of the main sticking points has been India’s desire for greater access to New Zealand’s services sector, particularly its IT industry. New Zealand has been hesitant to open up this sector, as it is a key part of its economy.

Another challenge has been the issue of agricultural subsidies. India provides significant subsidies to its farmers, which makes it difficult for New Zealand farmers to compete on price. Finding a solution to this issue has been one of the key areas of negotiation.

Conclusion

The New Zealand free trade agreement with India has the potential to be a game-changer for both countries. Increased trade could bring significant economic benefits, while closer diplomatic ties could lead to greater cooperation on a range of issues. However, negotiating the agreement has not been without its challenges, and there are still some key issues that need to be resolved. Nonetheless, the renewed commitment from both countries to reach a deal suggests that progress is being made, and we could see an agreement in the near future.