Brief Context
India and New Zealand announced the resumption of negotiations for a Free Trade Agreement (FTA) .
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Syllabus :GS 2/IR
In News
India and New Zealand announced the resumption of negotiations for a Free Trade Agreement (FTA) .
| Do you know ? – India is aiming to conclude trade negotiations with the US and the European Union in 2025. – Ongoing negotiations with Australia for a comprehensive trade deal and renegotiations of the ASEAN trade deal. |
Historical Linkages of India and New Zealand relations
- They have shared warm diplomatic ties since 1952, with similarities in Commonwealth membership, common law practices, and democratic governance.
- Tourism and sports, particularly cricket, hockey, and mountaineering, have fostered goodwill.
- In 2011, New Zealand identified India as a priority country through its “Opening Doors to India” policy and launched the NZ Inc. India Strategy to strengthen trade, economic, and political ties.
- The 2020 strategy paper, “India-NZ 2025 – Investing in the Relationship,” aims to build a long-term strategic relationship with India.
Bilateral Trade (2023-24):
- New Zealand exported goods/services worth US$ 0.84 billion to India and imported US$ 0.91 billion, with total trade valued at US$ 1.75 billion.
- India’s imports: Wool, Iron & Steel, Fruit & Nuts, Aluminium.
- India’s exports: Pharmaceuticals, Mechanical Machinery, Made-up Textile Articles, Pearls, Precious Stones & Metals.
Defence Cooperation
- Defence ties reflect overall friendly relations.
- INSV Tarini’s port call in New Zealand (Dec 2024-Jan 2025).
- INS Sahyadri and INS Kolkata visited New Zealand (Aug-Sept 2023).
- India contributes staff to Combined Task Force 150, led by RNZ Navy from January 2025.
Customs Cooperation
- In August 2024, India and NZ signed a Customs Cooperative Arrangement to boost trade and fight organized crime.
International Solar Alliance
- New Zealand ratified the International Solar Alliance during the President’s state visit to Wellington (Aug 2024).
Education:
- India is the 2nd largest source of international students in NZ, with approximately 8,000 Indian students in various fields (IT, hospitality, science, engineering, architecture).
People-to-People and Cultural Ties:
- There is strong cultural cooperation due to a large Indian diaspora in NZ.
- Indian festivals like Diwali, Holi, Baisakhi, Onam are celebrated with enthusiasm.
- Schools in NZ teach Indian traditional arts (Kathak, Bharatnatyam), Bollywood dance, and languages like Hindi.
Sports:
- Close sporting links, especially in cricket, hockey, and mountaineering.
- Sir Edmund Hillary, a NZ hero, is iconic in India for his mountaineering achievements.
Latest Developments
- The two countries started negotiating the Comprehensive Economic Cooperation Agreement (CECA) in April 2010 to promote trade in goods, services, and investment.
- Talks were stalled in 2015 after nine rounds of discussions.
- The aim of the FTA negotiations is to achieve balanced outcomes, enhance supply chain integration, and improve market access.
Challenges
- India seeks better access for skilled professionals and the IT/services sector, while New Zealand resists offering work opportunities like those for Australia and China.
- India withdrew from RCEP in 2019 over market access concerns.
- New Zealand has a low average import tariff (2.3%), while India’s is higher (17.8%), requiring significant reductions.
- New Zealand also seeks greater access to India’s protected dairy market.
Conclusion and Way Forward
- India and New Zealand share a strong and evolving relationship based on mutual respect and shared goals.
- With ongoing efforts to strengthen ties in trade, defense, education, and cultural exchanges, their partnership is set to grow, ensuring a more resilient and prosperous future for both nations.
Source :TH