India-New Zealand FTA near implementation, could be a 'beacon' for global trade: McClay

New Zealand's Trade and Investment Minister, Todd McClay, has said the India-New Zealand Free Trade Agreement is close to coming into force and could serve as a model for other countries at a time of global uncertainty over tariffs and trade rules.

In an interview, McClay said the two sides are working on exchanging official notes to begin implementation, and that the agreement should take effect within the next month. The enabling legislation has received Royal assent, completing New Zealand's domestic process, and the deal drew strong support in the country's Parliament.

Under the agreement, Indian exporters will get zero-tariff access to the New Zealand market from the first day, with particular openings in pharmaceuticals, chemicals, machinery and services. "On day one, every single thing India wants to sell to New Zealand will be at a zero-tariff rate," McClay said.

The pact is also expected to widen New Zealand's access to India's large consumer market, with opportunities in food, services and investment. McClay said he expects the agreement to spur two-way investment in areas such as infrastructure, manufacturing, science and innovation, citing a New Zealand company planning a manufacturing facility in India.

Both countries have set an ambitious goal of doubling bilateral trade by 2030. Current two-way trade stands at around NZ$4 billion, and New Zealand's official framework aspires to take it to NZ$7 billion by 2030. McClay expressed confidence the target could be exceeded.

He also underlined the people-to-people dimension, especially education, saying Indian students would continue to be welcomed and pointing to existing arrangements that allow master's and PhD students to work for longer after their studies. He said such students could take skills and experience gained in New Zealand back to India.

McClay predicted that direct flights between the two countries could begin within about a year, boosting tourism, business travel and family visits.

Reflecting on how negotiations concluded in nine months after years of talks, he attributed the breakthrough to political trust. Noting fluctuating tariff rates faced by businesses worldwide, he said the two governments had committed to honouring their commitments. He described his negotiations with his Indian counterpart, Piyush Goyal, as having developed into a close working relationship, with both sides aiming for the highest-quality agreement as quickly as possible.

Calling it one of the highest-quality agreements New Zealand and India have negotiated, McClay said it could send a wider message at a time when businesses seek certainty. "I think it can be a beacon for others to also do what we have done, where, when you respect the rules, businesses can grow and flourish," he said, adding that the FTA would create jobs in both countries.