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India and New Zealand have restarted free trade talks a decade after negotiations fell apart, as Prime Minister Christopher Luxon began his five-day tour of Delhi where he held bilateral talks withPrime Minister Narendra Modi.
The two sides have agreed to begin the first round of negotiations next month.
The announcement is a “major breakthrough” in the economic relationship between the two countries, Luxon said.
“India holds significant potential for New Zealand and will play a pivotal role in doubling New Zealand’s exports by value over the next 10 years,” Luxon said.
Bilateral trade between the two countries is valued at under $2bn (£1.55bn) currently.
Luxon is a keynote speaker at an ongoing geopolitical conference in Delhi, which will also be attended by the US Director of National Intelligence, Tulsi Gabbard.
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Besides trade, New Zealand said it was deepening its engagement with India across areas such as defence, security, sports and environment, adding that economic ties with Delhi were a “key priority”.
The two leaders signed a defence cooperation pact for enhanced maritime security and said they would be exploring greater collaboration in the digital payments sector.
On 16 March, representatives of the Five Eyes – an intelligence-sharing alliance comprising New Zealand along with Australia, Canada, the UK and the US – attended a conference of intelligence and security chiefs hosted by India’s National Security Adviser Ajit Doval in Delhi.
Proximity to New Zealand is crucial to Delhi’s interests, as India aims to counter China in the Indian Ocean region.
Luxon is reportedly being accompanied by one of the largest delegations a prime minister has ever travelled with, underscoring the importance of the visit.
Trade negotiations between the two countries had initially begun in 2010 but stalled after several rounds over issues such as market access.
New Zealand has sought greater access to India’s dairy market, which India has traditionally protected to support its farmers.
After years of scepticism over free trade, India has recently become more open to negotiating bilateral deals with other countries.
The announcement to restart trade talks with New Zealand comes close on the heels of India relaunching free trade agreement (FTA) negotiations with the European Union and the United Kingdom.
Last year, Delhi signed a $100bn free trade agreement with the European Free Trade Association – a group of four European countries that are not members of the European Union – after almost 16 years of negotiations.
India and Australia also signed a major trade cooperation deal two years ago.
Last week India’s trade minister Piyush Goyal had “cautioned” an Indian exports organisation “to come out of their protectionist mindset” as the country tried to negotiate trade agreements.
For Delhi, these trade talks have assumed renewed significance on the back of US President Donald Trump’s decision to impose tit-for-tat tariffs on imported goods from countries, including India. These are due to come into effect on 2 April.
This news is sourced from BBC and is intended for informational purposes only.
