A new dawn for Indian agriculture may be on the horizon, stemming from the recently concluded Free Trade Agreement (FTA) between India and New Zealand. This landmark deal, finalized in a record nine months, is being hailed as a significant victory for Indian farmers, with provisions designed to boost productivity, expand market access, and safeguard domestic interests.
The FTA aims to eliminate tariffs on 100% of India's exports to New Zealand, opening doors for a wide range of agricultural products, including fruits, vegetables, coffee, spices, cereals, and processed foods. This duty-free access is expected to significantly enhance the competitiveness of Indian agricultural exports, providing farmers with new opportunities to expand their customer base and increase their revenue.
One of the key features of the agreement is the establishment of Agricultural Productivity Partnerships through Centres of Excellence for apples, kiwifruit, and honey. These centers will facilitate the transfer of advanced agri-technologies and best practices from New Zealand, helping Indian farmers improve productivity, enhance quality, and increase their incomes. Targeted initiatives for horticultural products like honey, kiwifruit, and apples further strengthen the sector and support sustainable growth.
Recognizing the importance of protecting domestic interests, India has strategically excluded certain sensitive agricultural products, such as dairy, sugar, coffee, and edible oils, from tariff concessions. This move ensures that Indian farmers and MSMEs are shielded from undue competition, safeguarding their livelihoods and promoting the growth of domestic industries. However, India will offer restricted market access for certain agri goods like Manuka honey and apples through tariff rate quotas.
In addition to boosting agricultural trade, the FTA also strengthens investment ties between the two countries. New Zealand has committed to facilitating investments worth USD 20 billion in India over the next 15 years, targeting key sectors such as manufacturing, infrastructure, services, and innovation. This influx of investment is expected to create new jobs, drive economic growth, and further enhance the competitiveness of the Indian agricultural sector.
The India-New Zealand FTA is not just about trade and investment; it also includes provisions to enhance cooperation in various other areas, including AYUSH, culture, fisheries, audio-visual tourism, forestry, horticulture, and traditional knowledge systems. These collaborations will foster innovation, promote sustainable development, and strengthen the overall bilateral relationship between the two countries.
This agreement has been lauded as a "new generation trade agreement" built on tariffs, agricultural productivity, investment, and talent. It is a forward-looking deal focused on jobs, skills, innovation, and inclusive growth, aligning with India's vision of becoming a developed nation by 2047. The FTA is expected to be signed in three months and implemented next year.
While the FTA presents numerous opportunities for Indian farmers, it is important to acknowledge that challenges may also arise. To fully realize the benefits of the agreement, Indian agricultural exporters need to carefully navigate the complexities of FTAs, understand tariff schedules, comply with rules of origin, and manage non-tariff barriers. By addressing these challenges and embracing a strategic approach, Indian farmers can unlock the full potential of the India-New Zealand FTA and achieve a big victory in the global marketplace.
