India’s FTA Deal with New Zealand Set to Reduce China’s Dominance

New Delhi: India and New Zealand have successfully concluded negotiations on a Free Trade Agreement (FTA), a development that is expected to unsettle China’s stronghold on New Zealand’s imports. According to the Global Trade Research Initiative (GTRI), this FTA could significantly increase India’s share in New Zealand’s import market, where China currently dominates.

Trade Gap and Opportunities
GTRI data indicates that in FY2025, New Zealand imported goods worth $10 billion from China, while India’s exports to New Zealand stood at only $711 million. “India is underrepresented in several key product categories where it is a global leader, even though New Zealand is a major importer,” the report notes.

Key Sectors for India
The FTA is expected to open up substantial opportunities for India in pharmaceuticals, processed foods, electronics, machinery, vehicles, and furniture. The report highlights that these sectors could become the primary drivers of FTA-led trade growth, given the large gap between India’s global export capabilities and its limited presence in New Zealand’s market.

For example, India’s global bakery exports are valued at $602 million, yet exports to New Zealand amount to only $6.5 million. Similarly, India ships $817 million worth of food preparations worldwide but exports just $7.7 million to New Zealand.

Pharmaceutical Sector Potential
The pharmaceutical sector also presents a major opportunity. New Zealand imported $962 million worth of medicines, while India supplied only $75 million, despite its strong global competitiveness in the sector. The FTA could play a crucial role in bridging this gap.

Challenges Ahead
GTRI cautions that while the FTA has been signed, most of its benefits are yet to materialize. If effectively implemented, the India-New Zealand FTA could not only reduce the existing trade imbalance but also transform a modest bilateral relationship into a deeper, more diversified economic partnership.