1 week ago
India-New Zealand Trade Deal Seen Delivering Long-Term Economic Gains
India and New Zealand have signed a free-trade agreement.
A report says the deal could help New Zealand’s economy over the next 10 years.
India has a very large population and a fast-growing economy.
The agreement removes or lowers tariffs on most of New Zealand’s current exports.
This could save New Zealand exporters millions of New Zealand dollars each year.
The deal may also increase trade in services, tourism, education, and investment.
Indian customs have promised to release most goods within 48 hours and perishable goods within 24 hours when possible.
However, many dairy products are not fully covered by the agreement.
A Westpac Institutional Bank report says India’s growth could make the FTA a strategic gain for New Zealand.
The agreement could add nearly 0.1% to New Zealand’s GDP over the next decade.
Tariff elimination or reductions will cover 95% of New Zealand’s current exports to India.
Estimated tariff savings are NZ$43 million annually initially, rising to about NZ$62 million when fully implemented.
Most dairy products remain excluded, subject to quotas, or covered by phased liberalisation.
- Who
- India, New Zealand, and Westpac Institutional Bank, which published the report.
- What
- A recently signed free-trade agreement is expected to increase New Zealand’s economic gains from trade with India.
- Where
- Between India and New Zealand.
- When
- The agreement was recently signed; its economic effects are projected over the next decade.
- Why
- India’s large and growing economy could expand trade, while the agreement reduces tariffs, improves customs procedures, and supports investment, services, tourism, and education exports.
Expected Economic Benefits
Limits and Uncertainties
Trade and economic gains
Expected Economic Benefits
The Westpac Institutional Bank report says India’s growth, market size, and consumer spending could produce significant long-term gains for New Zealand, including a possible 0.1% GDP increase.
Limits and Uncertainties
The report says the projected gains depend partly on whether the FTA encourages proportionally greater trade with India; most dairy products also do not receive full liberalisation.
Market diversification
Expected Economic Benefits
The agreement could help New Zealand reduce its dependence on a relatively small number of export markets and strengthen strategic relations with India.
Limits and Uncertainties
India is currently only New Zealand’s 10th-largest export market, indicating that the agreement’s potential has not yet translated into a leading export relationship.
Key facts
- Projected GDP impact
- The FTA could add close to 0.1% to New Zealand’s GDP over the next decade.
- Export coverage
- Tariff elimination or substantial reductions apply to 95% of New Zealand’s current exports.
- Initial tariff savings
- Estimated at about NZ$43 million annually from the first day of implementation.
- Full tariff savings
- Estimated at about NZ$62 million annually when fully implemented, based on current trade levels.
- India’s current ranking
- India is New Zealand’s 10th-largest export market.
- Customs clearance
- Indian customs committed to releasing goods within 48 hours and to endeavour to release perishable goods within 24 hours.
- Dairy provisions
- Most dairy products are excluded, subject to quotas, or covered by phased liberalisation.
Quotes
Westpac Institutional Bank report
An Australia-based institutional bank whose report assesses the New Zealand-India free-trade agreement.
“Within five years, India's middle class is expected to exceed the entire population of the EU or ASEAN. Increasing influence in global trade, technology, investment and geopolitics”
freepressjournal.in
“India is one of the world's fastest-growing major economies and offers access to a market of 1.4 billion people – one fifth of the world’s population.”
freepressjournal.in
Sources
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