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In 2011 former Prime Minister John Key launched the NZ Inc India Strategy, a plan for India to become a core trade, economic and political partner for New Zealand. The NZ-India FTA is a crucial step toward achieving that goal.
New Zealand and India already enjoy a strong relationship. India was New Zealand’s 10th largest trading partner in the year to June 2016, with total trade in goods and services worth more than NZ$2.5 billion. Exports to India were worth NZ$1.7 billion (NZ$656 million in goods, NZ$1 billion in services) with imports worth NZ$821 million (NZ$591 million in goods, NZ$230 million in services). More than 10,000 Indian students came to study in New Zealand in 2015, and another 35,000 Indian tourists visited that year. There are well over 100,000 Indian nationals resident in New Zealand.
What are the potential benefits?
- better access for New Zealand businesses to India’s vast market for consumer products and services, particularly the growing middle class
- more opportunities to export raw materials and intermediate products needed by Indian manufacturers
- an agreement that addresses tariffs for our exporters. India’s average most-favoured-nation tariff is 12.9%, and their average tariff on agricultural goods is 34.4%. Negotiators will target these high tariffs, so New Zealand exports can be competitive in Indian markets
- better ways for dealing with sanitary and phytosanitary measures, technical barriers to trade, customs procedures, and rules of origin. This should allow a wider range of goods to be exported to India
- more opportunities for New Zealand’s service sector, including tourism, education, consultancy and professional services, environmental, engineering, construction, agriculture and forestry services
- more certainty for investors, and potential for more investment between the countries
Negotiations for the agreement were launched in April 2010. The last formal round of negotiations (the 10th round) occurred in Delhi in February 2015.
The way forward for the bilateral negotiations subsequently has been unclear, although informal meetings of Lead Negotiators occurred throughout 2015 and 2016 to try and reach common ground on a path forward to conclusion.
During former Prime Minister John Key’s visit to India in October 2016, he and Indian Prime Minister Narendra Modi issued a Joint Statement. This included a commitment to continue to work towards a high-quality, comprehensive and balanced bilateral Free Trade Agreement, which would deliver meaningful commercial outcomes to both sides.
How to get involved
MFAT negotiators are keen to hear from businesses or individuals who are facing barriers to the Indian market. This includes companies that are not exporting to India now, but plan to enter this market. Examples of the common sorts of barriers New Zealand businesses face offshore are:
- high tariffs, eg duties imposed on items at the border that add significantly to the price point in the market
- surcharges and duties required at the border
- sanitary and phytosanitary measures, eg restrictions on the type of animal or plant material allowed across the border
- technical barriers to trade (regulations or officially endorsed standards), import licensing, customs or transparency problems
- restrictions on individuals, eg difficulties with recognising qualifications or obtaining business visas, requirements to obtain local licences
- restrictions on investors, eg requirements to operate in joint ventures with local partners, requirements to employ locals or restrictions on the ability of New Zealanders to be transferred to work in subsidiaries or affiliates in India, local representation requirements for boards of directors, restrictions on the ability to invest in a new enterprise or invest equity in an Indian company
- financial or business restrictions, eg restrictions on supplying services from New Zealand (including via the internet), difficulties competing with local firms who benefit from government preferences, complex and discriminatory local regulations
We also want to hear from New Zealand companies that are interested in the negotiations.
For more information about the NZ-India FTA negotiations, or to give feedback, please contact us by:
Coordinator, India FTA
Ministry of Foreign Affairs and Trade
Private Bag 18901