Key Takeaways
- The New Zealand-India free trade agreement aims to eliminate or reduce tariffs on 95% of New Zealand’s existing exports to India.
- The agreement is expected to double New Zealand’s exports to India within five years, providing a competitive edge over Australia.
- Key sectors that will benefit from the agreement include sheep meat, wool, coal, forestry, seafood, and high-value dairy products.
- The agreement also offers enhanced market access, visas for Indian professionals, and a fast-track mechanism for pharmaceutical product approval.
- New Zealand has committed to promoting investment into India, with a target of increasing private sector investment by US$20 billion over 15 years.
Introduction to the Agreement
The New Zealand-India free trade agreement is a significant development that is expected to have a major impact on the economies of both countries. The agreement, which was signed after nine months of negotiations, aims to eliminate or reduce tariffs on 95% of New Zealand’s existing exports to India. This will provide a competitive edge for New Zealand exporters, particularly in key sectors such as sheep meat, wool, coal, forestry, seafood, and high-value dairy products. The agreement is also expected to double New Zealand’s exports to India within five years, which will be a major boost to the country’s economy.
Benefits for New Zealand
The agreement is a major win for New Zealand, as it will provide access to a huge and growing market. India is expected to become the world’s third-largest economy by 2030, and the agreement will provide New Zealand businesses with a unique opportunity to tap into this market. The agreement will also provide opportunities for New Zealand companies to invest in India, particularly in sectors such as food manufacturing, infrastructure, and digital services. The "New Zealand Investment Desk" that will be established by the Indian government will provide support and assistance to New Zealand investors, which will help to facilitate investment into India.
Benefits for India
The agreement is also a major win for India, as it will provide access to high-quality products from New Zealand. The agreement will also provide opportunities for Indian companies to invest in New Zealand, particularly in sectors such as agriculture and dairy. The agreement is part of India’s broader strategy to strengthen its economy and improve the lives of its citizens. The Indian government has set a goal of transforming the country into a self-reliant and prosperous economy by 2047, and the agreement with New Zealand is an important step towards achieving this goal.
Pay to Play Concept
The "pay to play" concept is a common practice in international trade, where a developing economy requires a partner to make substantial direct investments in return for greater access to their market. In this case, New Zealand has committed to promoting investment into India, with a target of increasing private sector investment by US$20 billion over 15 years. While this target may seem aspirational, it does not impose a low ceiling on New Zealand investment into India. In fact, the Indian government has established a "New Zealand Investment Desk" to assist New Zealand investors, which will help to facilitate investment into India.
Racism and Election Politicking
Unfortunately, the agreement has also been marred by racism and election politicking. Foreign Minister Winston Peters has made comments that have sparked a wave of xenophobic and racist comments on social media. Peters has implied that the agreement will lead to a major influx of Indian immigrants, which will take jobs away from New Zealanders. However, this is not supported by the facts, and the agreement actually includes a cap of 5000 new visas per year. The comments by Peters have been widely criticized, and it is disappointing to see racism and election politicking being used to try to undermine the agreement.
Credit Where It Is Due
Despite the challenges and criticisms, the New Zealand-India free trade agreement is a major achievement that deserves to be recognized. The Ministry of Foreign Affairs and Trade team has worked tirelessly to negotiate the agreement, and the public glory belongs to Luxon and McClay for setting a big ambition and getting an agreement in place before Christmas. The agreement is a significant development that will have a major impact on the economies of both countries, and it is a testament to the hard work and dedication of the teams involved in the negotiations.
Conclusion
In conclusion, the New Zealand-India free trade agreement is a significant development that will have a major impact on the economies of both countries. The agreement will provide access to a huge and growing market, and will provide opportunities for New Zealand companies to invest in India. While there have been challenges and criticisms, the agreement is a major achievement that deserves to be recognized. The Ministry of Foreign Affairs and Trade team, as well as Luxon and McClay, deserve credit for their hard work and dedication in negotiating the agreement. As the agreement is implemented, it will be important to monitor its progress and address any challenges that arise. However, for now, the agreement is a major win for both New Zealand and India, and it will provide a significant boost to the economies of both countries.
