Following many years of halted discussions, New Zealand and India are rushing to finalize a free-trade agreement, as Prime Minister Christopher Luxon has pledged to achieve an accord within 60 days.
The fresh initiative underscores New Delhi’s increasing enthusiasm for forming global trade alliances as a reaction to geopolitical issues, according to experts. At the same time, India is seeking accords with various countries. the UK and the EU , spurred by its goals for export-driven economic expansion and worries about American trade strategies.
On Tuesday, Luxon declared that following his meeting with the Indian minister in New Delhi, both countries expressed enthusiasm about concluding the protracted agreement.
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Ideally, we'll propel this partnership ahead, and I'm eager to finalize that agreement with the Prime Minister. [Narendra] Modi ," he said.
In 2024, bilateral trade between India and New Zealand surged more than 30 percent compared to the previous year, totaling $1.2 billion, as reported by India’s commerce department. Such an increase might be further boosted through a free-trade pact, which could enhance cooperation across various industries including farming, aviation, medicine, and clean power. According to Indian Commerce Minister Piyush Goyal, commercial exchanges between these nations have the potential to multiply ten times within the coming ten years.
Nevertheless, past talks faced obstacles due to India’s reserved position regarding its dairy industry, which was a major point of disagreement. Soumya Bhowmick, a fellow at the Observer Research Foundation think tank, highlighted that India’s protective policies were designed to shield local farmers from international competitors.

Bhowmick pointed out that this careful strategy stemmed from India’s plan to protect its supply chains, adding that New Delhi contended reduced duties on farm goods might jeopardize the incomes of millions of small-time agriculturists.
Despite the uncertainty surrounding the outcomes of the negotiations between New Zealand and India, experts suggest that this fresh diplomatic interaction underscores India's overarching economic plan, with a particular focus on boosting trade and expanding export activities.
Ajay Srivastava from the Delhi-based think tank Global Trade Initiative stated that India's decision-makers have been making efforts to reinforce relationships with key allies, notably following the onset of the Covid-19 pandemic.
The country from South Asia has inked multiple trade pacts recently, notably a 2021 agreement with Mauritius, succeeded by comparable deals with Australia and the UAE In 2022, the previous year saw India enter into an agreement with the European Free Trade Association, which includes Switzerland, Norway, Iceland, and Liechtenstein.
New-found urgency
In recent months, India's trade objectives have picked up speed. In February, both India and Britain committed to speeding up discussions for a trade agreement, encompassing an FTA along with an investment pact. That same month India and the EU have set a year-end target to conclude their negotiations on the Free Trade Agreement (FTA).
The European Commission President, Ursula von der Leyen, stated that the suggested free trade agreement (FTA) between the EU and India would represent "the biggest such accord globally."
"She assured full dedication to ensure our delivery capabilities" during her meeting with Modi in India, she stated.

Even with these pledges, India’s talks with both the UK and the EU have dragged on. and complex An early objective to conclude the UK agreement by late 2022 did not materialize, whereas India and the EU restarted their trade negotiations in 2022 following a nine-year break. Each party has expressed hopes of bolstering economic relations as a means to offset China’s increasing sway within the Indo-Pacific region.
Amitendu Palit, an economist and senior research fellow at the National University of Singapore’s Institute of South Asian Studies, noted that India's increased eagerness in talks was driven by changes in worldwide trade patterns along with the possible effects of U.S. tariffs on relationships among the United States, Europe, and Asia.
Washington's move away from a rules-based system in its trade policies during President's tenure Donald Trump This had led other nations to create rule-based structures with their trade partners to mitigate the impact of American policies, as he mentioned.
The pressing political need to finalize these longstanding relationships has gained momentum from the U.S. trade wars," Palit noted additionally. "To some extent, it has hastened the process.
Multi-alignment focus
India's proactive approach towards free trade agreements doesn't indicate a reduced enthusiasm for working with the U.S., say experts. Prime Minister Modi was one of the initial global leaders to do so. to meet Trump Following his return to the White House, both parties concurred on increasing bilateral trade. Nonetheless, India remains unchanged in its stance. face US tariffs scheduled to begin next month.
To handle its ties with Washington, Delhi has declared intends to decrease taxes on products from America including cars, specific farm goods, and chemicals.
Last week, authorities from India highlighted that discussions with the United States aimed at lowering trade barriers and improving supply chain collaboration were still in progress.

Palit contended that India's foreign policy has consistently followed a "multi-alignment" strategy, maintaining equilibrium across different international powerhouses. He indicated that India’s trade policies mirror this diplomatic stance.
He stated that for nations such as India, complete strategic seclusion is unachievable. He further emphasized that it’s essential for New Delhi to 'conform its trade policies to long-term national objectives by establishing free trade agreements with various allies,' since 'the U.S. is implementing a strategy of selective estrangement via its tariffs and trade regulations.'
Bhowmick supported this view, stating to This Week in Asia that concluding trade agreements with countries like New Zealand, the UK, and the EU might open up new market opportunities and bolster India’s goals of becoming an export-oriented economy.
He stated that this shared accessibility might boost economic expansion, generate employment opportunities, and encourage sector-wise ingenuity across all participating economies.
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