India-New Zealand Should Address Market Access And Connectivity Issues: GTRI

India and New Zealand should address market access issues for goods, promote collaborations in key sectors, and work on improving connectivity with an aim to boost bilateral trade, which is just USD 1.5 billion, think tank GTRI said on Sunday.

Both countries should set a target to double two-way trade within five years by identifying products for early tariff relief and organizing business delegations and roadshows in India, it said.

It also said that India's proposed free trade agreement with New Zealand would have limited benefit to domestic companies as they are already enjoying duty free access to a significant number of goods in that market.

New Zealand's average import tariff is just 2.3 per cent, compared to India's 17.8 per cent.

Besides, 58.3 per cent of New Zealand's tariff lines (or product categories) are duty-free, meaning Indian products already enjoy significant access without a trade pact in the New Zealand market, the Global Trade Research Initiative (GTRI) said.

GTRI Founder Ajay Srivastava said that while the India-New Zealand CECA (comprehensive economic cooperation agreement) negotiations remain stalled, both countries can take steps to enhance their trade and economic ties.

"By addressing market access issues, promoting collaboration in key sectors (like agriculture, pharmaceuticals, IT, education, and tourism), and improving connectivity, India and New Zealand can unlock their trade potential and create a more robust economic partnership," he said.

He added that the USD 1.54 billion bilateral trade in 2023-24 highlights a significant underperformance in economic ties.

With India's goods exports at USD 538.3 million and New Zealand's exports at USD 335.1 million, both countries have yet to tap into their true trade potential, he said.

India and New Zealand began negotiating the CECA in April 2010 to boost trade in goods, services, and investment. After nine rounds of discussions, however, the talks stalled in 2015.

The think tank also said that the Indian diaspora in New Zealand, with over 250,000 people of Indian origin, provides a strong cultural link that can be used to strengthen trade relations.

"Encouraging more Indian students to study in New Zealand by lowering fees and providing faster visa pathways could also boost New Zealand's education sector," GTRI said, adding collaboration across sectors such as agriculture, forestry, fintech, and education should be promoted to unlock trade potential.

Further improving connectivity is another critical step and increasing direct flights between the two nations would facilitate both trade and tourism.

"Simplifying visa processes, including introducing multi-entry, multi-year tourist visas, would also make it easier for business people and tourists to travel between the two countries," it added.

The GTRI suggested recognizing Indian professional qualifications as it could help fill skill gaps in New Zealand's labor market, particularly in sectors such as IT, healthcare, and aviation.

India's key goods exports to New Zealand include clothing, fabrics, and home textiles; medicines and medical supplies; refined petrol; agricultural equipment and machinery such as tractors and irrigation tools; auto; iron and steel; paper products; electronics; shrimps; diamonds; and basmati rice.

The main imports are agricultural goods, minerals, apples, kiwifruit, meat products such as lamb, mutton, milk albumin, lactose syrup, coking coal, logs and sawn timber, wool, and scrap metals.