India has finally settled on a Free Trade Agreement (FTA) with New Zealand and it is the 18 th agreement of this nature as the nation seeks to broaden its bilateral trade and investment relationship. According to the authorities, the deal is likely to be officially signed in the next three months and may be effective sometime next year.
The purpose of India New Zealand FTA is to enhance access to the markets, reduce trade barriers, and promote the inflow of investments between the two countries. After its introduction, the agreement will result in the appearance of new business opportunities in the most important sectors and enhance the general economic cooperation.
The agreement between New Zealand and India is one of an increasing number of FTA partners of India which already boasts of the European Free Trade Association (EFTA), Japan, South Korea, Oman, and Australia. India has signed significant trade agreements with Mauritius, the United Arab Emirates, Australia, EFTA countries and the United Kingdom since 2014, which is another indication of re-entering the global markets.
Free Trade Agreement is an economic agreement between two or more nations whereby they agree to either do away with or highly lower the customary rates on a large number of commodities exchanged between them. In addition to tariffs, FTAs also strive to lower non-tariff barriers that inhibit trade which may include complicated regulations and procedural limitations.
FTAs in most instances are not limited to goods only, but services and investment. Their focus is to facilitate standards of service exports, enhance investment environment, as well as encourage cross-boundary capital movements by providing clearer guidelines and much certainty to investors. Through this, the agreements contribute to the establishment of a more predictable and business conducive environment.
The proposed India-New Zealand FTA will lead to efficiency in trade, investor confidence, and the long-term plan of India in consolidating economic relations with other countries in the world.
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