India and New Zealand Revive Trade Talks After Decade
India and New Zealand have reignited free trade negotiations, marking a significant development in their economic relationship after talks stalled a decade ago. Prime Minister Christopher Luxon of New Zealand is currently on a five-day visit to Delhi, where he engaged in bilateral discussions with Indian Prime Minister Narendra Modi. The two nations have agreed to commence the first round of negotiations next month, a move Luxon describes as a “major breakthrough.”
Significance of the Trade Talks
The resumption of trade discussions is seen as a pivotal moment for both countries. Currently, bilateral trade between India and New Zealand is valued at under $2 billion (£1.55 billion). Prime Minister Luxon emphasized the potential of the Indian market, stating it could play a crucial role in doubling New Zealand’s exports by value over the next decade. This renewed focus on trade comes as India has become more receptive to negotiating bilateral agreements, moving away from its historically protectionist stance. Luxon’s visit coincides with his participation as a keynote speaker at a geopolitical conference in Delhi, which also features US Director of National Intelligence, Tulsi Gabbard. The discussions at the conference highlight the growing importance of international cooperation in various sectors, including trade and security.
Broader Engagement Beyond Trade
In addition to trade, New Zealand is looking to deepen its engagement with India across multiple sectors, including defense, security, sports, and environmental initiatives. During their meeting, Luxon and Modi signed a defense cooperation pact aimed at enhancing maritime security in the region. The two leaders also expressed interest in exploring greater collaboration in the digital payments sector, reflecting a commitment to modernizing their economic ties. The strategic importance of New Zealand to India is underscored by India’s efforts to counter China’s influence in the Indian Ocean region. Luxon is reportedly traveling with one of the largest delegations for a New Zealand prime minister, highlighting the significance of this diplomatic mission.
Historical Context and Future Prospects
Trade negotiations between India and New Zealand initially began in 2010 but faced challenges over issues such as market access, particularly concerning New Zealand’s desire for greater access to India’s dairy market. India has traditionally protected this sector to support its farmers. However, recent shifts in India’s trade policy indicate a willingness to engage in more open negotiations, as seen in its recent relaunch of free trade agreement (FTA) talks with the European Union and the United Kingdom. Last year, India successfully signed a $100 billion free trade agreement with the European Free Trade Association after nearly 16 years of negotiations. Additionally, India and Australia established a significant trade cooperation deal two years ago. As India navigates its trade landscape, the government has urged domestic exporters to adopt a less protectionist mindset, especially in light of recent tariff measures imposed by the United States.
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