New Delhi [India], July 14 (ANI): The free trade agreement (FTA) between India and New Zealand is likely to come into effect by the end of the year, according to New Zealand’s Minister for Trade and Investment, Todd McClay.
Speaking with ANI, McClay stated that both governments want the agreement to enter into force as quickly as possible. The pact has already passed its first reading vote in the New Zealand Parliament by 93 votes to 26 and is currently undergoing the formal legislative process.
“I think both governments would like the agreement to enter into force before the end of the year. It is a trade agreement worth celebrating. And as a result of the very high quality of the agreement, the negotiation, businesses in both countries will benefit very quickly. So we’re aiming towards the end of the year. But the bottom line is as quickly as we can get it enforced, it will be good for India and New Zealand,” McClay stated.
Minister McClay mentioned that during the visit of Prime Minister Modi, he and New Zealand Prime Minister Chris Luxon signed 16 declarations, the most significant being the elevation of the bilateral relationship to a strategic partnership. The upgraded partnership spans cooperation across the “economy, trade, defence, security, people-to-people links, science, climate change, and natural disaster resilience.”
McClay noted that the FTA establishes a priority desk for New Zealand investment in India to expedite approvals. Collaborative efforts are also underway between Air India and Air New Zealand to secure permissions for direct flights, which the Minister expects to commence within the next one to two years to benefit business travel, tourism, and the 350,000-strong Indian diaspora in New Zealand.
Addressing geopolitical challenges, McClay noted that ongoing tensions in West Asia present economic concerns, particularly regarding rising fuel and fertilizer costs that increase food production and shipping expenses. However, he emphasized that the agreement provides a mechanism for both nations to build resilient supply chains and maintain economic certainty despite global instability.
“We would like the war to finish. We want certainty there. Certainly, Iran should not be allowed to develop nuclear weapons, but we think dialogue and discussion now are the right way forward. An escalating fuel price around the world has a detrimental effect. It makes it more expensive for consumers, for our households, but it also puts pressure on, you know, the cost going up when it comes to production,” McClay said
“We find that when one part of the world is uncertain and there is risk, other parts can step up. And this agreement between India and New Zealand is an opportunity for us to say that…between our two nations, we should build that resilience. We should look at how we fix supply chains. We should work on those direct air links. We should look at how we can have better shipping service and bring the cost down so that we can continue to trade with each other. That means businesses in India and New Zealand can have certainty because of the work of our two prime ministers and our governments, even though from parts of Europe to the Middle East to around America, sometimes it’s not as certain as it should be,” he added.
Looking toward future cooperation, McClay confirmed that the next phase of bilateral engagement will involve critical minerals, security, advanced manufacturing, and space technology.
Under the FTA, Minister McClay highlighted that India will receive zero-tariff access to New Zealand for its exports on day one, which is expected to boost Indian exports in goods, services, agricultural machinery, automobiles, and chemicals. In return, up to 95 per cent of New Zealand’s exports to India will become tariff-free or face significant tariff reductions over the next seven to eight years. (ANI)
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