New Delhi: India and New Zealand on Monday started the second round of negotiations for the proposed free trade agreement, aimed at boosting two-way commerce and investments, an official said.
These talks will end on July 25.
After a gap of about ten years, the two countries on March 16 this year announced the resumption of negotiations for the trade pact.
"The second round of negotiations started on July 14 here," the official said.
India and New Zealand began negotiating the Comprehensive Economic Cooperation Agreement (CECA) in April 2010. However, after ten rounds of discussions, the talks stalled in February 2015.
According to economic think tank Global Trade Research Initiative (GTRI), a major challenge in the renewed talks will be the disparity in tariff structures.
New Zealand's average import tariff is only 2.3 per cent, with over half of its tariff lines already duty-free, meaning Indian goods already have substantial access to its market.
In contrast, India's average tariff stands at about 17 per cent, meaning it would have to make significant reductions, making a traditional FTA less attractive for India, the GTRI has said.
Earlier, New Zealand had demanded greater access to India's dairy market, which India has resisted to protect its domestic industry that supports millions of farmers.
Currently, India's dairy imports from New Zealand are minimal (around USD 0.57 million). The country has not given duty concessions in the sector in any of its trade pacts.
New Zealand may look for duty concessions on products like meat and wine.
The bilateral trade between the two countries stood at USD 1.3 billion (exports USD 711.08 million and imports USD 587.15 million) in 2024-25. It was USD 873.4 million (exports USD 538.33 million and imports USD 335 million) in 2023-24.
India's key goods exports to New Zealand include clothing, fabrics, and home textiles; medicines and medical supplies; refined petrol, agricultural equipment and machinery such as tractors and irrigation tools, auto, iron and steel, paper products, electronics, shrimps, diamonds, and basmati rice.
The main imports are agricultural goods, minerals, apples, kiwi fruit, meat products such as lamb, mutton, milk albumin, lactose syrup, coking coal, logs and sawn timber, wool, and scrap metals.
In FY24, India's services exports to New Zealand stood at USD 214.1 million, while New Zealand's services exports to India totalled USD 456.5 million.
India's key services exports include IT and software services, provided by companies such as Infosys and HCL, along with telecommunications services to support New Zealand's digital infrastructure.
India also exports healthcare services, including medical tourism, pharmaceutical research, and telemedicine. Financial services are another important area, with Indian banks and fintech companies offering digital payment solutions.
New Zealand's services exports to India are led by education services, with thousands of Indian students pursuing higher education in New Zealand.
Tourism services are also significant, as Indian tourists are drawn to New Zealand's natural landscapes and adventure activities.
New Zealand provides fintech services, offering digital solutions to India's financial sector, and specialised aviation training programmes for pilots and cabin crew.
Additionally, New Zealand firms offer niche IT services such as data analytics and automation solutions.
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