India, New Zealand should target doubling bilateral trade: GTRI

New Delhi, Dec 21 (PTI) India and New Zealand should look to double bilateral trade in the next five years by reducing import duties on select products and enhance collaborations in areas like agriculture, think tank GTRI said on Sunday.

More direct flights, simpler visa rules and mutual recognition of professional qualifications, particularly in IT, healthcare, and aviation, would further promote trade in services sector, it said.

"Both countries could set a target to double two-way trade within five years through early tariff relief on select products, business delegations and sectoral cooperation in agriculture, forestry, fintech and education," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said.

India and New Zealand are set to announce the conclusion of negotiations on a comprehensive free-trade agreement, talks for which began in 2010, then stalled in 2015 after nine rounds, and were revived again this year.

The first round of talks held on May 5-9 this year.

The pact will focus on cutting tariffs on goods, improving access in services and strengthening trade facilitation, while preserving policy space in politically sensitive areas, especially dairy, he said.

Under the deal, tariffs are expected to be eliminated or sharply reduced on a wide range of industrial products, textiles, engineering goods, fuels and some agricultural items, with sensitive farm products protected through exclusion lists, tariff-rate quotas and long phase-out periods, he added.

He also said services commitments are likely to deepen cooperation in IT, business services, education and digital trade, alongside provisions on customs facilitation, standards, MSMEs, sustainability, and dispute settlement.

"For India, the agreement strengthens access to a high-income, rules-based market in the Pacific and supports its broader Indo-Pacific economic strategy. For New Zealand, it offers more secure entry into one of the world's fastest-growing large economies amid rising global trade uncertainty," Srivastava said.

In FY25, the bilateral trade was about USD 1.3 billion (India's exports USD 711.1 million and imports USD 587.1 million).

New Zealand's average import tariff is just 2.3 per cent, compared with India's 17.8 per cent, and 58.3 per cent of New Zealand's tariff lines are already duty-free.

"That means Indian exporters already enjoy substantial access, while India will shoulder most of the adjustment through tariff reductions," he said.

India's export basket to New Zealand is broad-based but concentrated in fuels, textiles, and pharmaceuticals.

Aviation turbine fuel (ATF) led shipments at USD 110.8 million, followed by clothing, fabrics, and home textiles were worth USD 95.8 million.

Medicines accounted for USD 57.5 million, while machinery, including turbojets, contributed USD 51.8 million.

Petroleum products were another major component, with diesel exports of USD 47.8 million and petrol of USD 22.7 million.

Other notable exports included automobiles and parts (USD 19.3 million), paper and paperboard (USD 18.3 million), electronics (USD 16.5 million), iron and steel (USD 14.1 million), shrimps (USD 13.7 million), basmati rice (USD 11.9 million) and gold jewellery (USD 9.9 million).

New Zealand's exports to India, by contrast, are dominated by raw materials and agricultural inputs.

Wood and wood articles (USD 78.4 million) and wood pulp (USD 39.8 million) underline linkages in paper, packaging and construction.

Steel scrap exports reached USD 71.2 million, while aluminium scrap totaled USD 42.9 million, reflecting India's dependence on recycled metal inputs.

In energy and heavy industry, coking coal exports stood at USD 48.8 million, alongside high-value turbojets worth USD 66.2 million.

Agricultural and animal-based products also play a significant role, led by shorn wool (USD 47.3 million), milk albumin (USD 32.1 million), apples (USD 32.8 million) and kiwi fruit (USD 17 million).

It also said New Zealand is one of the world's largest dairy exporters, while India is home to millions of small dairy farmers for whom market protection is a red-line issue.

In practice, however, current trade is minimal. New Zealand's dairy exports to India in FY25 totaled just USD 1.07 million, consisting of milk and cream (USD 0.40 million), natural honey (USD 0.32 million), mozzarella cheese (USD 0.18 million), butter (USD 0.09 million), and skimmed milk (USD 0.08 million).

India has resisted opening the door to bulk dairy imports, though it may after some time allow limited access for niche, value-added products, he said.

Services trade is a more significant -- if less visible -- pillar of the relationship.

In FY24, India's services exports to New Zealand stood at USD 214.1 million, while New Zealand's services exports to India totaled USD 456.5 million.

India's strengths lie in IT and software services, telecommunications support, healthcare and financial services.

New Zealand's services exports are led by education -- driven by Indian students -- followed by tourism, fintech solutions, and specialised aviation training, he added. PTI RR TRB