Visa norms to get easier, 100% duty-free exports as India, NZ ink trade pact

New Delhi: India and New Zealand on Monday signed a bilateral trade agreement in what was described as a "once-in-a-generation" opportunity. It is expected to be implemented by the end of the year, and allow 100% duty-free access for goods shipped from the country, along with easier visa rules for students and skilled professionals and freer access for yoga professionals, AYUSH practitioners and musicians.

Besides, New Zealand has committed to invest $20 billion over the next 15 years, with trade minister Todd McClay identifying infrastructure among sectors where some of the investment will be made with govt facilitating the flows. With the agreement in place, both sides are looking to double bilateral trade in goods and services to $5 billion in five years.

He also appeared confident of the deal going through despite his govt's coalition partner New Zealand First's concerns, as the opposition New Zealand Labour Party has backed it.

"We have a majority in Parliament to pass this agreement. All trade agreements that have been presented to Parliament have enjoyed super majority of the two largest parties... we have had bipartisanship," McClay said amid concerns expressed.

The deal was finalised within nine months of negotiations restarting, and India has managed to keep its sensitive farm products and dairy outside the ambit of the treaty. "The FTA catalyses new opportunities for our farmers, artisans, youth entrepreneurs, women and MSMEs, unlocking pathways for global market access and enterprise across sectors, from agriculture and manufacturing to technology, education and services," PM Narendra Modi said.

Commerce and industry minister Piyush Goyal said this is India's ninth agreement in the past few years, with the UK and Oman deals to be operationalised in the coming weeks, even as the trade pact with EU is awaiting approval.

"At the heart of the agreement is the empowerment for exports, agricultural productivity, student mobility, skills, investment and services," he said.

Goyal said that India can hope to garner a bigger share across product segments from footwear to automobiles. The trade agreement, for which negotiations were concluded in Dec, will provide duty-free access for India's exports including textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods. New Zealand has peak tariffs of up to 10% in segments such as ceramics, carpets, automobiles, and auto components.

On its part, India will lower tariff on 70% tariff lines, covering 95% of bilateral trade value, while keeping nearly 30% of the products outside the purview of the pact.

While the treaty opens the doors for Indian professionals, Goyal said he has also invited GCCs from other New Zealand to take advantage of the skilled manpower in the country and lower their costs. India has offered concessions in sectors such as banking through permission to let New Zealand open more branches here.

McClay said that New Zealand companies intend to use the provisions of the treaty to import goods to India and re-export after value addition. Goyal clarified that some of these goods, which may be related to agriculture or dairy, will not be allowed to be sold in the domestic market and can only be used for export, in line with India's foreign trade policy.


Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.