Because of how the investment is set to benefit, the deal with New Zealand is special not only for India’s trade gains but also. The story so far: After coming into force on October 20 , India’s trade deal with New Zealand became the seventh such agreement to take effect in the last five years. There are also several other provisions, such as those related to mobility, that make the deal stand out.
The India-New Zealand Free Trade Agreement (FTA) provides India with duty-free access to 100% of New Zealand’s tariff lines. with some countries such as the U.K. offering more than 99% of their tariff lines duty-free , and a 100% duty exemption on all tariff lines has so far not come to pass in a full trade deal While all other deals India has signed so far have granted partial or substantial duty-free access. Before the implementation of the deal, New Zealand levied a 10% tariff on imports from India related to textiles, apparel, leather and footwear, engineering goods, plastics and rubber, and electronics.
As per the official text of the agreement, New Zealand “shall promote foreign direct investment (FDI) from investors of New Zealand into India with the aim to increase such investment by U.S. dollars 20 billion within 15 years” of the agreement coming into force. This is one of the elements that makes the deal stand out. Each of these sectors is an area where India has substantial export capacity, and all of them stand to benefit.
The deal also introduces a new working holiday scheme for Indian nationals aged 18 to 30 within two years of the FTA entering into force. Under this scheme, up to 1,000 successful applicants can spend up to 12 months in New Zealand without work. That is, it is implicit in the deal that, should India not grow in the future as it has done in the past, New Zealand is not under an obligation to go on trying to promote FDI in India. However, investments routed through New Zealand by foreign investors not established in New Zealand or established there without substantial NZ business activity shall not be considered investments from New Zealand into India.
