India and New Zealand conclude free trade agreement to boost bilateral trade

Al Jazeera
Al Jazeera
3h ago
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India and New Zealand reached a free trade deal enhancing market access, investment, and labor mobility between the two countries.
India and New Zealand conclude free trade agreement to boost bilateral trade
A What happened
India and New Zealand have agreed on a free trade deal expected to significantly increase bilateral trade and investment. India gains zero-duty access for exports to New Zealand, while New Zealand receives phased tariff concessions on about 70% of Indian tariff lines covering 95% of its exports to India. The deal includes a $20 billion investment commitment and easier access for skilled Indian professionals to New Zealand's labor market. This agreement reflects broader efforts by both countries to reduce reliance on vulnerable trade routes amid uncertainties caused by US tariffs. Certain sensitive agricultural products are excluded to address domestic concerns in both countries. The deal is pending legal review before formal signing in early 2026.

Key insights

  • 1

    Strategic trade diversification amid global protectionism: The agreement exemplifies how middle-sized economies are seeking bilateral trade expansion to counterbalance risks from major powers' protectionist policies, such as those of the US.

  • 2

    Balancing economic openness with domestic sensitivities: Both India and New Zealand excluded sensitive agricultural items from the deal to mitigate domestic political backlash while still pursuing broader market access.

  • 3

    Investment and skilled labor mobility as trade facilitators: Beyond tariff reductions, the deal emphasizes investment flows and workforce mobility, signaling a comprehensive approach to deepen economic integration.

Takeaways

The India-New Zealand free trade agreement is set to expand market access and investment while navigating political sensitivities, fitting into a global trend of diversification away from unilateral trade dependencies.

Topics

Business & Markets Economy World & Politics Policy & Regulation Trade & Tariffs

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