View: India–New Zealand FTA a win-win deal

The recent Free Trade Agreement (FTA) signed between India and New Zealand marks a significant milestone in India's evolving trade diplomacy and economic strategy. This bilateral pact is designed to foster deeper economic ties, boost trade volumes, and create a more integrated market between the two nations, offering substantial benefits across various sectors.

**Background Context and What Happened:**

India, a rapidly growing economy, has been strategically recalibrating its foreign trade policy. After opting out of the Regional Comprehensive Economic Partnership (RCEP) in 2019 due to concerns over potential adverse impacts on its domestic industries, particularly agriculture and dairy, India has increasingly focused on forging bilateral FTAs with key economies. This shift is part of a broader strategy to diversify its export markets, attract foreign investment, and integrate into global value chains on its own terms. New Zealand, a developed economy with a strong focus on agricultural exports, tourism, and services, has also been keen to expand its trade relationships beyond traditional partners, particularly in the dynamic Indo-Pacific region. Negotiations for an FTA between India and New Zealand have been ongoing for several years, reflecting the complexities of balancing market access demands with domestic sensitivities.

The newly signed FTA is a comprehensive agreement. Its core provisions include New Zealand offering zero-duty access to a wide range of Indian exports. This is a crucial win for Indian manufacturers and service providers, as it removes tariff barriers, making Indian goods and services more competitive in the New Zealand market. In return, India has secured improved market access for its services sector in New Zealand. This reciprocal arrangement aims to create a 'win-win' situation, stimulating economic activity in both countries. The agreement is explicitly designed to create jobs, boost investment, and open new opportunities for diverse segments of the Indian population, including small businesses, students, women, farmers, and youth.

**Key Stakeholders Involved:**

The primary stakeholders in this FTA are the governments of India and New Zealand, represented by their respective Ministries of Commerce and Trade. For India, the **Ministry of Commerce and Industry** has been instrumental in the negotiations and finalisation. Indian businesses, particularly exporters from sectors like textiles, pharmaceuticals, engineering goods, and IT services, stand to gain significant market access. Small and Medium Enterprises (SMEs) are specifically targeted for new opportunities, potentially boosting their global outreach. Farmers, while sometimes facing competition from imports in other FTAs, may find new avenues for specific agricultural exports, though the dairy sector remains a sensitive point. The youth and students are expected to benefit from increased educational and employment opportunities, while women entrepreneurs can leverage new market access. On the New Zealand side, dairy, timber, tourism, and education sectors are key stakeholders, looking for enhanced engagement with the vast Indian market.

**Significance for India:**

This FTA holds immense significance for India across economic, strategic, and social dimensions. **Economically**, zero-duty access to New Zealand for Indian exports will provide a significant boost to India's 'Make in India' initiative, enabling domestic manufacturers to scale up production for global markets. Enhanced market access for services, particularly in IT, education, and healthcare, aligns with India's strength as a services-led economy. This can lead to increased foreign exchange earnings, job creation, and technological up-gradation. The pact also helps diversify India's export basket and reduce reliance on a few major markets.

**Strategically**, the agreement strengthens India's ties with a key partner in the Indo-Pacific region. It aligns with India's broader **Act East Policy** and its vision for a free, open, and inclusive Indo-Pacific. Deepening engagement with New Zealand, a member of the Five Eyes intelligence alliance and a significant voice in regional forums, enhances India's diplomatic influence and strategic outreach in Oceania. **Socially**, the emphasis on creating opportunities for small businesses, women, youth, and students reflects an inclusive growth agenda, aiming to ensure that the benefits of trade are widely distributed.

**Historical Context and Constitutional References:**

India's journey with FTAs has evolved significantly. Early FTAs often drew criticism for not adequately protecting domestic interests. The experience with RCEP, where India chose to withdraw, underscored a more cautious and calibrated approach to trade agreements. India now prioritizes bilateral agreements that are mutually beneficial and protect sensitive sectors while opening new growth avenues. This FTA with New Zealand reflects this refined strategy.

From a constitutional perspective, the Union Government's power to enter into such international agreements is derived from **Article 73** of the Constitution, which states that the executive power of the Union extends to matters with respect to which Parliament has power to make laws. Specifically, **Article 246** read with **Schedule VII, List I (Union List), Entry 14**, grants the Union Parliament exclusive power to legislate on