India-New Zealand: Free trade talks relaunched after a decade

New Zealand Prime Minister Christopher Luxon has begun a five-day visit to Delhi, during which he held bilateral talks with Indian Prime Minister Narendra Modi. During the talks, the two countries announced the resumption of free trade negotiations, after previous negotiations stalled a decade ago.

Both sides have agreed to launch the first round of negotiations next month. Prime Minister Luxon said the announcement was a "major breakthrough" in economic relations between the two countries. He pointed out that India has enormous potential for New Zealand and will play a key role in the goal of doubling New Zealand's exports over the next decade.

Currently, bilateral trade between the two countries is less than $2 billion (£1.55 billion). In addition to trade issues, New Zealand has stated that it is deepening cooperation with India in areas such as defense, security, sports, and the environment. New Zealand emphasizes that economic ties with Delhi are a "key priority."

The two leaders signed a defense cooperation agreement aimed at strengthening maritime security and said they would explore broader cooperation in the field of digital payments. In addition, representatives from the "Five Eyes" alliance (including New Zealand, Australia, Canada, the United Kingdom, and the United States) attended an intelligence and security summit hosted by Indian National Security Advisor Ajit Doval in Delhi on March 16.

For Delhi, New Zealand's geographical location is crucial as India aims to counter China's influence in the Indian Ocean region. The large size of the delegation accompanying Prime Minister Luxon reportedly underscores the importance of the visit. Trade negotiations between the two countries initially began in 2010, but stalled after several rounds due to issues such as market access.

New Zealand has been seeking to expand its access to India's dairy market, which India has traditionally protected in order to support its own farmers. After years of skepticism about free trade, India has recently become more willing to engage in bilateral trade negotiations with other countries. The news of the resumption of trade negotiations with New Zealand follows Delhi's restart of free trade agreement (FTA) negotiations with the EU and the UK.

Last year, Delhi signed a $100 billion free trade agreement with the European Free Trade Association (comprising four non-EU European countries) after nearly 16 years of negotiations. India and Australia also signed a significant trade cooperation agreement two years ago. Last week, Indian Trade Minister Piyush Goyal "admonished" an Indian export organization to "shed its protectionist mindset" as the country tries to negotiate trade deals.

For Delhi, these trade negotiations have taken on new significance stemming from US President Donald Trump's decision to impose tit-for-tat tariffs on imports from countries including India. These tariffs are expected to take effect on April 2.