Nearly a decade on, New Zealand keen to restart FTA talks

NEW DELHI : New Zealand is attempting to come back to the negotiating table with India to work out a bilateral free trade agreement (FTA), almost a decade after talks were abandoned by the two countries following their failure to narrow differences in some sensitive areas including dairy and agriculture, sources said.

New Zea­l­and Trade Min­is­ter Todd McClay, sched­uled to be in New Delhi this week to meet Com­merce Min­is­ter Shri Piy­ush Goyal and the busi­ness com­munity, is expec­ted to make a strong pitch for restart­ing the FTA talks, sources told.

“For long, New Zea­l­and was not too inter­ested in resum­ing the FTA talks without inclu­sion of dairy. But after India signed the Eco­nomic Cooper­a­tion and Trade Agree­ment (ECTA) with Aus­tralia, things seem to have changed. The new coali­tion gov­ern­ment that came to power in New Zea­l­and in Octo­ber 2023 is now very inter­ested in explor­ing an FTA pact,” the source said. McClay recently told a select com­mit­tee in his coun­try that it will be his fault if New Zea­l­and did not secure an FTA with India this term, not Prime Min­is­ter Chris­topher Luxon’s who made the prom­ise.

India is at present final­ising a set of Stand­ard Oper­at­ing Pro­ced­ures for nego­ti­at­ing FTAs.

Lot of Scope

New Zea­l­and, was India’s 87th largest trad­ing part­ner in FY24 with exports to the coun­try at $538 mil­lion and imports at $335 mil­lion. While India’s exports mostly com­prise phar­ma­ceut­ical products, min­eral fuels, tex­tiles and machinery, its imports include min­eral fuels, wood, iron and steel and kiwi fruit.

At a Joint Trade Com­mit­tee meet­ing earlier this year the coun­tries acknow­ledged that there was a lot of scope to increase the two­way trade as they accoun­ted for a sub­optimal share in total trade.

“One of the import­ant reas­ons why the FTA talks were sus­pen­ded in 2015 after around five years of nego­ti­ations was because India had refused to give any access to its dairy mar­ket. Dairy is New Zea­l­and’s largest export item and con­trib­utes sig­ni­fic­antly to GDP,” the offi­cial said. But things have changed now.

Earlier this month, New Zea­l­and’s For­eign Affairs Min­is­ter Win­ston Peters, at the India New Zea­l­and Busi­ness Coun­cil’s annual address in Auck­land, broadly hin­ted at it. “I think there’s a chance that we will be announ­cing the begin­ning of nego­ti­ations on that [trade deal] mat­ter,” Peters is repor­ted to have said.

India has always been an import­ant part­ner, the Min­is­ter high­lighted.

“When we came to gov­ern­ment just over a year ago, it was obvi­ous that a clearer, more determ­ined, and more vig­or­ous approach was required,” he said.