India and  New Zealand resumed trade deal talks after decade

Syllabus :GS 2/IR

In News

India and New Zealand announced the resumption of negotiations for a Free Trade Agreement (FTA) .

Do you know ? – India is aiming to conclude trade negotiations with the US and the European Union in 2025. – Ongoing negotiations with Australia for a comprehensive trade deal and renegotiations of the ASEAN trade deal.

Historical Linkages of India and New Zealand relations

• They have shared warm diplomatic ties since 1952, with similarities in Commonwealth membership, common law practices, and democratic governance.
• Tourism and sports, particularly cricket, hockey, and mountaineering, have fostered goodwill.
• In 2011, New Zealand identified India as a priority country through its “Opening Doors to India” policy and launched the NZ Inc. India Strategy to strengthen trade, economic, and political ties.
•  The 2020 strategy paper, “India-NZ 2025 – Investing in the Relationship,” aims to build a long-term strategic relationship with India.

Bilateral Trade (2023-24):

• New Zealand  exported goods/services worth US$ 0.84 billion to India and imported US$ 0.91 billion, with total trade valued at US$ 1.75 billion.
  • India’s imports: Wool, Iron & Steel, Fruit & Nuts, Aluminium.
  • India’s exports: Pharmaceuticals, Mechanical Machinery, Made-up Textile Articles, Pearls, Precious Stones & Metals.

Defence Cooperation

• Defence ties reflect overall friendly relations.
• INSV Tarini’s port call in New Zealand (Dec 2024-Jan 2025).
• INS Sahyadri and INS Kolkata visited New Zealand (Aug-Sept 2023).
• India contributes staff to Combined Task Force 150, led by RNZ Navy from January 2025.

Customs Cooperation

• In August 2024, India and NZ signed a Customs Cooperative Arrangement to boost trade and fight organized crime.

International Solar Alliance

• New Zealand ratified the International Solar Alliance during the President’s state visit to Wellington (Aug 2024).

Education:

• India is the 2nd largest source of international students in NZ, with approximately 8,000 Indian students in various fields (IT, hospitality, science, engineering, architecture).

People-to-People and Cultural Ties:

• There is strong cultural cooperation due to a large Indian diaspora in NZ.
• Indian festivals like Diwali, Holi, Baisakhi, Onam are celebrated with enthusiasm.
• Schools in NZ teach Indian traditional arts (Kathak, Bharatnatyam), Bollywood dance, and languages like Hindi.

Sports:

• Close sporting links, especially in cricket, hockey, and mountaineering.
• Sir Edmund Hillary, a NZ hero, is iconic in India for his mountaineering achievements.

Latest Developments 

• The two countries started negotiating the Comprehensive Economic Cooperation Agreement (CECA) in April 2010 to promote trade in goods, services, and investment.
• Talks were stalled in 2015 after nine rounds of discussions.
• The aim of the FTA negotiations is to achieve balanced outcomes, enhance supply chain integration, and improve market access.

Challenges

• India seeks better access for skilled professionals and the IT/services sector, while New Zealand resists offering work opportunities like those for Australia and China. 
• India withdrew from RCEP in 2019 over market access concerns.
•  New Zealand has a low average import tariff (2.3%), while India’s is higher (17.8%), requiring significant reductions. 
• New Zealand also seeks greater access to India’s protected dairy market.

Conclusion and Way Forward 

• India and New Zealand share a strong and evolving relationship based on mutual respect and shared goals. 
• With ongoing efforts to strengthen ties in trade, defense, education, and cultural exchanges, their partnership is set to grow, ensuring a more resilient and prosperous future for both nations.

Source  :TH