New Delhi: India and New Zealand have made significant strides in strengthening their economic and trade relations over the past few years. As both countries continue to build on their strong diplomatic ties and shared aspirations for economic growth, the scope for enhancing bilateral trade and investment remains high.
Recent discussions between both the nations have centred on the need to explore emerging opportunities and foster greater bilateral trade and investments, which could contribute to sustainable and inclusive economic growth for both nations.
Bilateral trade between India and New Zealand
The trade relationship between India and New Zealand has experienced notable growth and fluctuation in recent years. Data from 2019-2024 reflects key developments in the exports, imports, and trade balance between the two countries. In 2019-20, India's exports to New Zealand were valued at USD 379 million, while imports stood at USD 522 million, resulting in a trade deficit of USD 143 million. However, this trend shifted in the subsequent years, with India gradually increasing its exports, leading to a positive trade balance.
India's exports to New Zealand increased to USD 486 million, while imports fell to USD 382 million in 2020-21, creating a surplus of USD 105 million. This positive trend continued in 2021-22, with exports rising and imports decreasing, resulting in a trade surplus of USD 113 million.
The trade balance remained favorable for India in 2022-23, with total trade reaching USD 1,026 million and a surplus of USD 70 million. In 2023-24, exports to New Zealand remained strong at USD 538 million, while imports decreased further to USD 335 million, leading to a higher trade surplus of USD 203 million.
Top items of bilateral exchange between India and New Zealand
India's top exports to New Zealand include a diverse range of products such as pharmaceutical products, mineral fuels and oils, textile articles, machinery, nuclear reactors, and boilers. Other significant items include pearls, precious stones, and metals, along with various articles of apparel, both knit and non-knit. Vehicles, articles of iron or steel, and electrical and electronic equipment also make up a considerable portion of India's exports to New Zealand, reflecting the broad trade relationship between the two countries.
India's top imports from New Zealand include dairy products, such as milk and cream, as well as butter and cheese. Other key imports are meat, wine, wool, and wood. Additionally, India imports a variety of agricultural products, such as fruits, particularly apples and kiwis, as well as fertilizers. These imports reflect New Zealand's strong agricultural and food production sector, which plays a significant role in India's trade relationship with the country.
New economic initiatives boosting trade through collaboration
Several new initiatives have been launched to enhance bilateral cooperation between India and New Zealand. One such initiative is the signing of the Authorized Economic Operators Mutual Recognition Arrangement (AEO-MRA) under the Customs Cooperation Arrangement (CCA) in 2024.
This arrangement is expected to facilitate smoother movement of goods between the two countries, promoting trade by recognizing each other’s trusted traders. Through closer cooperation between customs authorities, the AEO-MRA aims to reduce trade barriers and encourage the flow of goods, making trade processes more efficient and cost-effective.
Another key area of cooperation is in horticulture and forestry. The two countries signed a Memorandum of Cooperation on Horticulture, aimed at promoting knowledge and research exchanges in the sector, as well as the development of post-harvest and marketing infrastructure. Additionally, a Letter of Intent on Forestry Cooperation was signed to encourage policy dialogues and technical exchanges, providing a platform for enhancing cooperation in sustainable forestry practices.
Tourism strengthens bilateral ties between India and New Zealand
Tourism also plays a pivotal role in deepening the relationship between India and New Zealand. The growing number of tourists traveling between the two countries has not only boosted economic growth but also fostered a greater understanding between their people. Recognizing the potential of this sector, both countries have taken steps to enhance connectivity by updating the India-New Zealand Air Services Agreement. This agreement encourages carriers from both nations to begin direct (non-stop) flights, which will not only improve tourism flows but also enhance business engagement and people-to-people ties.
Historical ties and foundations for futuristic growth
India and New Zealand have shared warm and friendly diplomatic ties since the establishment of relations in 1952. Both countries share several similarities, such as their membership in the Commonwealth, common law practices, and democratic governance systems.
These shared values have laid the groundwork for fruitful cooperation in various sectors, including trade, education, tourism, and sports.Sporting ties, particularly in cricket, hockey, and mountaineering, have also contributed to fostering goodwill and strengthening people-to-people relationships. Over the years, the bilateral relationship has blossomed through a combination of economic, cultural, and diplomatic exchanges.
One of the most significant recent developments in the India-New Zealand trade relationship is the restart of Free Trade Agreement (FTA) negotiations after a 10-year pause. Both countries have agreed to negotiate a balanced, ambitious, and mutually beneficial trade agreement, aimed at achieving deeper economic integration and fostering stronger trade ties. A comprehensive FTA has the potential to unlock new opportunities for businesses, reduce barriers to trade, and expand market access for goods and services on both sides.
The urgency of these negotiations has been spurred by the shifting geopolitical landscape, with countries like India actively pursuing bilateral trade deals with the United States, the United Kingdom, the European Union, and others. The FTA negotiations with New Zealand are expected to complement these broader efforts, promoting mutual growth and reducing the risk of tariff wars.
Opportunities in signing an FTA
As the FTA negotiations gain momentum, both India and New Zealand are looking to leverage their respective strengths. India, with its large consumer market and rapidly growing technology and services sectors, is well-positioned to benefit from enhanced access to New Zealand’s agricultural and dairy products, as well as its expertise in sectors such as horticulture, forestry, and tourism. Conversely, New Zealand stands to gain from enhanced access to India’s emerging markets, particularly in sectors like information technology, pharmaceuticals, and textiles.
A promising future for India-New Zealand trade relations
India and New Zealand are poised to strengthen their economic ties in the coming years. The growing momentum in bilateral trade, the strategic cooperation in areas like horticulture, forestry, and tourism, and the restart of FTA negotiations signal a promising future for both nations. By continuing to build on their complementarities and exploring new areas of collaboration, India and New Zealand can unlock the full potential of their economic relationship, contributing to sustainable growth and prosperity for both countries.
In conclusion, the deepening trade and investment ties between India and New Zealand are a testament to the strong foundation of bilateral cooperation that has been built over the years. With continued collaboration and the successful completion of the FTA negotiations, the two countries are well on their way to becoming key economic partners in the Asia-Pacific region.
