India and New Zealand have officially relaunched their free trade talks after a decade of stagnation, a move that comes amidst a backdrop of evolving global trade dynamics influenced by U.S. trade policies, particularly those initiated by President Donald Trump. This important announcement was made during New Zealand Prime Minister Christopher Luxon’s five-day official visit to India, where he is scheduled to meet with Indian Prime Minister Narendra Modi.
The bilateral trade relationship between India and New Zealand is currently valued at under $2 billion (£1.55 billion). Prime Minister Luxon emphasized the potential for India to significantly bolster New Zealand’s exports by value over the next 10 years, indicating that this trade agreement could be a major breakthrough for both nations.
The opening round of negotiations is set to kick off next month, marking a significant step forward in the trade relations that initially began in 2010 but fell apart after several rounds over contentious issues, including market access. New Zealand has long sought greater access to India’s dairy market, which is heavily protected to support local farmers.
Recent shifts in India’s stance have made it increasingly amenable to negotiating bilateral agreements. In fact, the revival of trade talks with New Zealand comes shortly after India reinitiated FTA negotiations with the European Union and the United Kingdom. This revitalization of trade talks follows India’s successful signing of a $100 billion trade agreement with the European Free Trade Association last year, which came after nearly 16 years of negotiations.
During his visit, Luxon will address an ongoing geopolitical conference, highlighting the strategic role that India plays in the Indo-Pacific region. The Prime Minister stated, “India is an important power in the Indo-Pacific, and I will discuss with Prime Minister Modi what more we can do together to maintain peace and prosperity in our region.”
Additionally, Luxon’s delegation is one of the largest ever accompanying a New Zealand Prime Minister, underscoring the significance of this visit and the potential economic benefits of deeper engagement with India. Alongside trade, the two countries aim to strengthen cooperation in defense, security, sports, and environmental issues as part of their broader strategic partnership.
The renewed interest in free trade negotiations comes at a time when U.S. tariff decisions under President Trump have prompted countries to reevaluate their trade policies. Recently, Trump announced a series of tariffs on imported goods from various nations, including India, set to take effect on April 2, reinforcing the urgency for India to solidify its trade stance as it seeks to expand its international market relationships.