India, New Zealand aim to conclude free-trade deal in 60 days as Trump tariff war looms

New Delhi: India and New Zealand, which began negotiations on a free trade agreement (FTA) just two days ago, aim to conclude the deal in as little as 60 days, top officials from both nations said on Tuesday.

Speaking at the India-New Zealand Economic Forum, organised by industry body FICCI, New Zealand Prime Minister Christopher Luxon expressed confidence in the trade ministers’ ability to fast-track the agreement.

Also read | We want FTA with India and it will be fair to both: New Zealand envoy

“We have high expectations from our trade ministers,” Luxon said, adding with a touch of humour that if the trade ministers managed to wrap it up in 60 days, they might end up with a hairstyle like his. "When we look at the trading relationship today… there's a huge opportunity for us here,” he added.

Speaking at the event, Piyush Goyal, minister of commerce and industry, said India also aspires to conclude the FTA quickly “What if we were to complete it in 60 days… I am sure together we can make a significant difference to the economies of India and New Zealand,” he said.

A new record?

While ironing out the details of FTAs typically takes a long time, India and the UAE concluded their Comprehensive Economic Partnership Agreement (CEPA) in a record 88 days before signing it on 18 February 2022.

On Sunday, India and New Zealand announced the launch of talks for an FTA as part of efforts to deepen economic cooperation amid the threat of a global tariff war sparked by US President Donald Trump. The decision was formalised during the ongoing visit of Prime Minister Luxon, who is in India from 16 to 20 March.

Also read: Trump brandishes tariffs, but India and UK are back talking trade

The discussions, led by Goyal and New Zealand’s trade and investment minister Todd McClay, mark a step towards stronger bilateral trade relations. "Whether it's food processing, pharma, renewable energy, critical minerals, policy, horticulture, tourism, or sports, I think the sky is the limit. Education and research are also areas where we must focus because that's what makes people closer to each other," Goyal said. Bilateral trade between both nations could grow 10-fold in just a decade, he added. 

"Manufacturing in India, producing in India for the world at competitive prices can help us take this partnership to greater heights," Goyal said.

Untapped potential

Bilateral merchandise trade between India and New Zealand remained below $1 billion in FY24, with India’s goods exports at $538.3 million and New Zealand’s at $335.1 million, highlighting the untapped potential in their economic partnership.

Interestingly, India's exports to New Zealand reported a 1.74% fall and imports registered a 29.86% fall in FY24, according to data from the commerce ministry.

Also read | FTA will help reduce luxury watch taxes: Panerai CEO Pontroué

New Zealand aims to deepen its trade ties with India by focusing on dairy, food processing and technology, while India seeks broader market access for its agricultural products, textiles, and IT services.

India has signed FTAs with several countries and entities, including Japan, South Korea, Australia, and the European Free Trade Association (EFTA) in the past few years to increase trade, investment and economic cooperation. The country is also negotiating FTAs with Oman, ASEAN and the European Union, among others.