New research suggests the New Zealand–India Free Trade Agreement (FTA) will deliver commercially meaningful gains from entry into force, but its greatest value is likely to emerge over time as New Zealand businesses build their presence in one of the world’s fastest-growing major economies.
The finding is at the heart of new research released today by the New Zealand International Business Forum (NZIBF) and Westpac Economics.
NZIBF Executive Director, Felicity Roxburgh says the FTA would give New Zealand exporters more options in an uncertain international environment, while also positioning the country to benefit from India’s long-term economic transformation.
“This agreement delivers tangible benefits for exporters, but its significance goes well beyond the immediate tariff savings,” Ms Roxburgh says.
“It provides a platform for New Zealand businesses to develop new products, establish stronger commercial relationships and build a sustained presence in a market of 1.4 billion people.”
The report identifies significant opportunities for sheep meat, forestry, kiwifruit, apples and wine. It also highlights the potential for stronger education and tourism flows, supported by New Zealand’s 300,000-strong Indian diaspora and deeper people-to-people connections.
Government-commissioned modelling estimates the FTA could lift New Zealand’s annual GDP by around $380 million and exports to India by $836 million by 2036. This new report considers those estimates conservative because they capture the agreement’s direct effects, but not all the wider benefits likely to accumulate as India’s economy grows.
“The FTA will not transform trade overnight, and meaningful dairy access remains unfinished business,” Ms Roxburgh says.
“But it gives New Zealand a stronger foothold in one of the defining economic growth stories of the coming decades. Its value should continue to build as more businesses enter the market and the relationship broadens.”
Westpac NZ Managing Director of Institutional and Business Banking, Reuben Tucker says the deal will expand opportunities for exporters, investors and service providers, and the bank is ready to help them capitalise on those opportunities.
“India is only our 10th-largest export market, but we see that changing as this FTA brings us closer together,” Mr Tucker says.
“Banks need to step up and be part of that growth story. At Westpac we’ve increased our lending to small and medium-sized businesses well ahead of the market over the last couple of years and we’ll continue to lend to help grow our productive economy, as well as providing expert advice and insights for businesses looking to diversify and explore new markets.”
The agreement’s implementing legislation is currently progressing through Parliament as New Zealand works towards ratification and entry into force.
“Completing the parliamentary process and bringing the agreement into force as soon as possible will give exporters the certainty to start converting these opportunities into trade, investment and jobs,” Ms Roxburgh says.
The report, The New Zealand–India Free Trade Agreement, was produced jointly by the New Zealand International Business Forum and Westpac Economics.
