New Zealand Secures Landmark Free Trade Agreement With India
by New Zealand Government · SCOOPHon Todd McClay
Minister for Trade and Investment
Minister of Agriculture
Minister of Forestry
New Zealand andIndia haveconcludedaFree TradeAgreement,offeringNew Zealandersunprecedented access to 1.4 billionIndianconsumers, Trade and Investment Minister Todd McClay announced today.
This historic Agreement eliminates and reduces tariffs on 95 per cent of New Zealand’s exports – among the highest of any Indian FTA - with almost 57 per cent being duty-free from day one, increasing to 82 per cent when fully implemented, with the remaining 13 per cent subject to sharp tariff cuts.
ItputsNew Zealand exporters onanequal or better footingto ourcompetitorsacross a range of sectorsand opensthe door to India’s rapidly expanding middle class.
Negotiations began on 21 March and concluded after nine months of intensive effort.
“This once-in-a-generationAgreement creates opportunities New Zealand exporters have never had in India.This deal is in New Zealand’s best interest and will deliver thousands of jobs and billions inadditionalexports,”MrMcClaysays.
“The Indian economy is forecast to grow toNZ$12 trillion by 2030.The India-NZFreeTrade Agreementunleasheshuge potentialfor our world-classexporters tothe world’s largest countryand willsignificantlyaccelerate progresstowardsNew Zealand’sambitiousgoalof doubling the value of exportsover10 years.”
Key outcomesfor New Zealandinclude:
- Tariff elimination or reduction on 95 per cent of our exports.
- Duty-free accessonalmost 57 per centof New Zealand’s exports from day one,increasingto 82per cent when fully implemented, with the remaining 13 per cent being subject to sharp tariff cuts.
- Immediate tariff elimination on sheep meat, wool, coal and over 95 per cent of forestryand woodexports.
- Duty-free accesson most seafood exports, including mussels and salmon, over seven years.
- Duty-free accesson most iron,steelandscrap aluminium, over 10 yearsor less.
- Duty-free access for most industrial products, over five to 10 years
- 50 per cent tariff cut forlarge quotaof apples – nearly double recent average exports.
- Duty-free access forkiwifruit within a quota almost four times ourrecent average exports, and tariff halved forexportsoutside ofquota.
- Duty-free access forcherries, avocados,persimmonsandblueberries, over10 years.
- Tariffs on wine reducedfrom 150 per cent toeither25or50 per cent (depending on the value of the wine) over 10 yearsplusMostFavouredNations (MFN)commitment.
- Tariffs onmānukahoneycutfrom 66 per cent to 16.5 per cent over five years.
- MFNstatus and liberalisation across services exports.
- Duty-free accessfordairy and otherfood ingredientsfor re-exportfrom day one.
- Duty-free accessfor bulk infant formula and otherhigh-valuedairypreparationsover seven years.
- 50 percent tariff cut for high value milk albumins within a NZ-specific quota equal to current export volumes.
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“In a world-first New Zealand will have duty-free access for a large kiwifruit quota – nearly four times our current exports - with a 50 per cent tariff applying outside quota. For the first time in an FTA, India has agreed preferential market access for apples and mānuka honey," Mr McClay says.
“The FTA has broad services coverage and builds significantly on India’s WTO commitments with a focus on financial services, e-payments and FinTech, and includes an MFN clause to future-proof our services trade.
“To protect specialist and iconic New Zealand product names in each other’s markets, we have agreed to establishGeographicalIndication rules comparable to those we have with the EU.
“This FTA future-proofs New Zealand’s dairy access by offering a right to negotiate should India give better access to comparable countries, by triggering an automatic consultation process to consult and upgrade.”
“New Zealand exporters will enjoy duty-free access for dairy and other food ingredients for re-export through the FTA,openingthe doortogreater collaborationand processing,andofferaccess to India’sgrowing number of FTA partnersthrough adedicated fast-track mechanism,” Mr McClay says.
“To better provide the skills to grow the New Zealand economy the Agreement establishes a process for up to an average of 1,667 skilled 3-year work visas per year. These temporary visas will focus on priority jobs where New Zealand has skills shortages, including doctors, nurses, teachers, ICT and engineering and are non-renewable.
“Sectors will be drawn from the New Zealand skills shortage ‘Green List’ with all immigration screening and qualification/experience requirements remaining unaltered. We have retained the ability to change the Green List to match skills shortages in the economy.
“In addition, to ensure our tourismand ruralsectorshavethe workersthey needwe have aligned ourWorkingHolidaySchemewithAustralia’sIndian FTA, providing up to 1,000 places each year,” Mr McClay says.
The Agreement includes a Treaty of Waitangi clause allowing us to meet Treaty obligations, as well as Chapters on Customs Facilitation and Clearance, Technical Barriers to Trade, Sanitary and Phyto-Sanitary Standards, Culture, Trade and Traditional Knowledge, Economic Cooperation, Trade and Sustainable Development.
“We've also agreed to review the FTA one year after entry into force, which provides a mechanism to pursue further improvements into the future,” Mr McClay says.
Mr McClay says this is a good deal that delivers for every New Zealander.
“Trade grows the economy and creates jobs - the NZ India Free Trade Agreement is about future-proofing opportunities for our exporters and allowing Kiwi companies to continue to punch above their weight on the world stage.”
New Zealandand Indiaexpect the Agreement to be signed in the first halfofnext year.
For more information go to:www.mfat.govt.nz/nz-india-fta.
NZ-India FTA Key Tariff Outcomes.pdf
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