Prime Minister Narendra Modi will embark on his inaugural official visit to New Zealand next week. This event marks a significant milestone, as it is the first visit by an Indian Prime Minister to New Zealand in four decades. New Zealand’s Prime Minister, Christopher Luxon, made this announcement in a statement reported by the news agency Reuters on Friday.

PM Modi is scheduled to arrive in Auckland on July 10 and will depart the following day. This visit comes more than two months after India and New Zealand concluded negotiations on a free trade agreement (FTA). Such timing reflects the strengthening economic ties between the two nations.

The FTA, which was negotiated over a period of nine months, is regarded as one of the quickest trade agreements India has finalised so far. The pact illustrates both countries’ commitment to enhancing bilateral trade relations.

Key Benefits of the Free Trade Agreement

One of the primary advantages for India is the provision for complete duty-free access for all its 8,284 export products in the New Zealand market from the outset of the FTA’s implementation. This immediate access is expected to bolster India’s exports significantly, benefiting various sectors within the country.

Additionally, India stands to gain from the duty-free inputs for its manufacturing sector, including critical resources such as wooden logs, coking coal, and metal scraps. These provisions are anticipated to reduce production costs and improve the competitiveness of Indian industries in domestic and international markets.

The agreement further encompasses collaborative efforts in agriculture, featuring a tailored agrotechnology plan aimed at supporting Indian farmers. This initiative is expected to provide essential inputs for the production of kiwi, apple, and honey, enhancing agricultural output in India.

Tariff Adjustments and Sector Protection

The FTA specifies that 95 per cent of tariffs on goods exported from New Zealand will be eliminated, offering substantial advantages to New Zealand exporters. The agreement will facilitate trade in various products such as wool, wine, timber, coal, and fruits including avocados and blueberries.

In an effort to safeguard sensitive sectors within its economy, India has opted to exclude approximately 30 per cent of its tariff lines from the FTA. Key areas protected under this provision include dairy products, edible oils, and gems and jewellery, reflecting India’s cautious approach to maintaining essential domestic industries.

As the visit approaches, both nations are expressing optimism regarding the potential benefits of the FTA and the strengthened diplomatic ties that may result from PM Modi’s historic trip. This visit is anticipated to pave the way for deeper collaboration between India and New Zealand across various sectors.

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