India on Monday announced closure of negotiations for a free trade agreement signed with New Zealand, its 18th deal so far as the country aims to boost bilateral trade and investments. Other regions and countries with which India has signed such agreements include the four-nation European bloc EFTA, Japan, Korea, Oman and Australia. Since 2014, India has signed six trade pacts with Mauritius, the UAE, Australia, EFTA and the UK.
What FTA means
Free trade agreement (FTA) is an economic arrangement between two or more countries where they agree either to end or significantly reduce customs duties on the maximum number of goods traded between them, besides cutting down non-trade barriers on a significant value of imports from partner countries and easing norms to promote services exports and bilateral investments.
Benefits of FTAs
Zero-duty entry into partner country markets helps in the diversification and expansion of export markets. Such pacts attract foreign investment to stimulate domestic manufacturing. They allow access to raw materials, intermediate products and capital goods for value-added manufacturing.
Deals signed by India so far
India has inked trade deals with Sri Lanka, Bhutan, Thailand, Singapore, Malaysia, Korea, Japan, Australia, the UAE, Mauritius, the 10-nation bloc ASEAN (Association of Southeast Asian Nations) and four European nations' bloc EFTA (Iceland, Liechtenstein, Norway and Switzerland).
In addition, India is negotiating trade agreements with a number of its trading partners, including the US, New Zealand, the European Union (EU), Chile, Peru and Israel.
What it means for India, NZ
All Indian goods, including labour-intensive sectors like textiles, plastic items, leather and engineering goods, will enter at zero duty in New Zealand.
New Zealand has given a commitment to invest US $20 billion over 15 years. India has secured commitments across a wide range of high-value services sectors, including IT and IT-enabled services, professional services, education, financial services, tourism, construction and other business services.
The FTA opens skilled employment pathways through a new temporary employment entry visa pathway for Indian professionals in skilled occupations with a quota of 5,000 visas at any given time and a stay of up to three years.
Also read: Indo-EU FTA will be a ‘win-win’ for all: Goyal
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